Amended and Restated Senior Secured Credit Agreement, among Midwest Airlines, Inc., Midwest Air Group, Inc., its subsidiaries, Wells Fargo Bank Northwest, National Association and the lenders party thereto, dated as of September 3, 2008

“Cape Town Convention” means the official English language text of the Cape Town Convention on International Interests in Mobile Equipment and the Cape Town Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment prepared under the joint auspices of the International Institute for the Unification of Private Law and the International Civil Aviation Organization, which was signed in Cape Town South Africa on November 16, 2001.

 

“Capital Lease Obligations” means, as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

 

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

“Cash Equivalents” means any of the following types of Investments, to the extent owned by any Loan Party free and clear of all Liens (other than Liens created under the Collateral Documents):

 

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

 

“CFC” means a “controlled foreign corporation” under Section 957 of the Code.

 

“Change of Control” means an event or series of events by which:

 

 

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, 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, including Slot trades.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“United States” and “U.S.” mean the United States of America.

 

“United States Citizen” has the meaning specified in Section 5.01.

 

“Use or Lose Rule” means with respect to the Slots, the terms of 14 C.F.R. § 93.227.

 

“Wells Fargo” has the meaning specified in the preamble.

 

1.02 Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

 

 

 

 

 

 

 

1.03 Accounting Terms.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements.

 

1.04 References to Agreements and Laws.  Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 

1.05 Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

1.06 Uniform Commercial Code.

 

Unless otherwise defined herein, terms used in Article X that are defined in the UCC shall have the meanings assigned to them in the UCC.

 

 

 

 

2.02 Prepayments.

 

 

 

 

 

 

 

 

Notwithstanding the foregoing, prepayments made with respect to the Reimbursement Obligations pursuant to clauses (i) through (iv), to the extent that such prepayments were made with respect to Reimbursement Obligations not yet due and owing, shall be held by the Collateral Agent and deposited into the Reimbursement Obligation Collateral Account.

 

2.03 Repayment of Term Loans. The Borrower shall repay to the Administrative Agent for the ratable account of the Lenders on the Maturity Date the aggregate principal amount of all Term Loans outstanding on such date.

 

 

 

 

2.05 Computation of Interest.  All computations of interest shall be made on the basis of a 365-day year and actual days elapsed.  Interest shall accrue on each Term Loan for the day on which the Term Loan is made, and shall not accrue on a Term Loan, or any portion thereof, for the day on which the Term Loan or such portion is paid, provided that any Term Loan that is repaid on the same day on which it is made shall bear interest for one day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

 

 

 

 

 

 

 

 

 

2.08 Sharing of Payments.  If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Term Loans made by it, anypayment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise, but excluding any payment or set-off relating to the Airline Service Agreement or any leases entered into in connection therewith) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Term Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Term Loans or such participations, as the case may be, pro rata with each of them; provided further that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 12.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon.  The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of setoff, but subject to Section 12.08) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments.  Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.

 

 

 

 

 

 

3.02 Matters Applicable to All Requests for Compensation.  A certificate of the Administrative Agent or any Lender claiming compensation under this Article III and setting forth the additional amount or amounts to be paid to it hereunder and the basis therefor shall be conclusive in the absence of manifest error.  In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods.

 

3.03 Survival.  All of the Borrower’s obligations under this Article III shall survive termination of the Term Commitments and repayment of all other Obligations hereunder.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.02 Milestone Achievement Date Conditions.  The obligation of each Lender to make a Term Loan pursuant to Sections 2.01(c) and 2.01(d) shall become effective on the first date (the “Milestone Achievement Date”) on which all of the following conditions precedent shall have been satisfied to the satisfaction of each Significant Lender:

 

(a) The Amendment and Restatement Effective Date shall have occurred;

 

(b) A Term Note executed by the Borrower in favor of each Lender requesting a Term Note shall have been received by the Administrative Agent on behalf of each such Lender;

 

(c) The Borrower shall have paid all Attorney Costs of the Lenders, Administrative Agent and the Collateral Agent;

 

(d) The representations and warranties of the Borrower and each other Loan Party contained in Article V and each other Loan Document, and which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the Milestone Achievement Date and the date of the Term Borrowing pursuant to Section 2.01(c) as certified by a Responsible Officer of each Loan Party to the Administrative Agent and each Lender;

 

(e) No Default shall exist or would result from the making of the Term Loans pursuant to Sections 2.01(c) and 2.01(d);

 

(f) No material work disruptions or stoppages by employees of any of the Loan Parties shall have occurred and be continuing;

 

(g) The Loan Parties shall have entered into binding agreements with Skywest Airlines, Inc. and Boeing Capital Corporation in form and substance acceptable to the TPG Entities and Republic, in each of their sole discretion, that include provisions to effectuate the cash flow and permanent cost reductions described in the Business Plan or otherwise acceptable to the TPG Entities and Republic, in each of their sole discretion;

 

(h) The Borrower shall have delivered to the TPG Entities and Republic a business plan in form and substance acceptable to the TPG Entities and Republic, in each of their sole discretion, (the “Business Plan”) and the TPG Entities and Republic shall have determined that the Loan Parties are capable of achieving the cash flow and permanent cost reduction targets set forth in the Business Plan;

 

(i) The Borrower shall have implemented a fuel hedging strategy in form and substance acceptable to the TPG Entities and Republic, in each of their sole discretion,;

 

(j) No event or circumstance shall have occurred since the Amendment and Restatement Effective Date that, in the view of each of the TPG Entities and Republic, in each of their sole discretion, has resulted in a Material Adverse Effect that is continuing or that would be reasonably expected to result in a Material Adverse Effect; and

 

(k) The Borrower shall have delivered to the Administrative Agent and each Significant Lender a certificate from a Responsible Officer of the Borrower certifying that the conditions precedent to the Milestone Achievement Date have been satisfied (except as to matters that require the approval or satisfaction of the Administrative Agent, the Collateral Agent and/or the Lenders), together with such evidence with respect thereto as the Administrative Agent or any Significant Lender may request.

 

 

The Loan Parties jointly and severally represent and warrant to the Administrative Agent, the Collateral Agent and the Lenders that:

 

5.01 Existence, Qualification and Power; Compliance with Laws; “Air Carrier Status”.  Each Loan Party (a) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in the case of clause (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.  The Borrower (and no other Loan Party) is an “air carrier” within the meaning of Section 40102 of Title 49 and holds a certificate under Section 41102 of Title 49 or commuter air carrier authorizations.  Each such Person holds air carrier operating certificates issued pursuant to Chapter 447 of Title 49.  Parent, the Borrower and each Subsidiary that is an “air carrier” are each a “citizen of the United States” as defined in Section 40102(a)(15) of Title 49 (a “United States Citizen”).  Parent, the Borrower and each Subsidiary that is an “air carrier” possess all necessary certificates, franchises, licenses, permits, rights, authorizations and concessions and consents which are material to the operation of the routes flown by it and the conduct of its business and operations as currently conducted.

 

5.02 Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party are within such Loan Party’s corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law.  Except as set forth on Schedule 5.02, no Loan Party is in material breach of any material Contractual Obligation.

 

5.03 Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (i) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents or (iii) the perfection or maintenance of the Liens created under the Collateral Documents except in each case for such consents, exemptions, authorizations, approvals, actions, notices and filings listed on Schedule 5.03 hereto, all of which have been duly obtained, taken, given or made and are in full force and effect.

 

5.04 Binding Effect.    This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes and each other Loan Document constitutes a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

5.05 Financial Statements.

 

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, and (ii) fairly present the financial condition of the Parent and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby.

 

(b) The unaudited consolidated financial statements of the Borrower and its Subsidiaries dated May 31, 2008, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, and (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

 

5.06 Litigation.  There are no actions, suits, proceedings, claims or disputes pending or, to the best knowledge of the Borrower, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against Parent, the Borrower or any of the Borrower’s Subsidiaries or against any of their properties or revenues that either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.  The performance of any action by any Loan Party required or contemplated by any of the Loan Documents is not restrained or enjoined (either temporarily, preliminary or permanently).  There are no actions, suits or proceedings pending that challenge the validity of any Loan Document or the applicability or enforceability of any Loan Document which seek to void, avoid, limit, or otherwise adversely affect the security interest created by or in any Loan Document or any payment made pursuant thereto.

 

 5.07 No Default.  No Default has occurred and is continuing or would result from the execution, delivery or performance of this Agreement or any other Loan Document or the transactions contemplated hereby or thereby.

 

5.08 Ownership of Property.

5.10 Insurance.  The properties of the Loan Parties are insured or reinsured with financially sound and reputable insurance companies not Affiliates of the Borrower (other than Cardinal Insurance Company, Cayman Ltd.), in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the applicable Loan Party operates.

 

5.11 Taxes.  The Loan Parties have filed all Federal, state and other material tax returns and reports required to be filed, and have paid or made adequate provision for payment of all Federal, state and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets that are due and payable, except, in each case, those which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and for which adequate reserves have been provided in accordance with GAAP.  There is no proposed tax assessment against any Loan Party that would, if made, have a Material Adverse Effect.  No Loan Party is party to any tax sharing agreement with any Person other than another Loan Party other than the tax allocation and separation agreement dated as of September 27, 1995 among certain of the Loan Parties, Kimberly-Clark Corporation, a Delaware corporation, K-C Nevada, Inc., a Nevada corporation and Astral Aviation, Inc., a Delaware corporation

 

5.12 ERISA Compliance. Each of Parent and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could reasonably be expected to result in material liability of the Borrower or any of its ERISA Affiliates.

 

5.13 Subsidiaries; Equity Interests.  Each Loan Party has no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable, except in the case of any Wisconsin corporation, subject to personal liability which may be imposed on shareholders by former Section 180.0622(2)(b) of the Wisconsin Business Corporation Law for debts incurred prior to June 14, 2006 (for debts incurred on or after such date, such Section has been repealed), and are owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens except those created under the Collateral Documents.  Set forth in Part (b) of Schedule 5.13 is a complete and accurate list of all Investments (other than (i) Cash Equivalents and (ii) those Investments set forth in Part (a) of Schedule 5.13) held by any Loan Party on the date hereof, showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.  No Loan Party has any equity investments in any other corporation or entity other than those specifically disclosed in Part (a) or Part (b) of Schedule 5.13.

 

5.14 Margin Regulations; Investment Company Act; .

 

(a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock and no proceeds of the Term Loans will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

 

(b) None of Parent, the Borrower or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940 (the “ICA”).  Neither the making of any Term Loan nor the application of the proceeds or repayment thereof by the Borrower, nor the consummation of the other transactions contemplated by the Loan Documents, will violate any provision of any the ICA or any rule, regulation or order of the SEC thereunder.

 

5.15 Disclosure.  All information that has been made available to the Administrative Agent or any Lender by the Borrower or any of its representatives in connection with the transactions contemplated hereby is complete and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statements were made.

 

5.16 Compliance with Laws.  Each Loan Party is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.19 Slot Utilization.  The Borrower and its Subsidiaries are utilizing the Slots in a manner consistent with applicable regulations and contracts in order to preserve the value of the Slots, taking into account any waivers or other relief granted to the Borrower and/or its Subsidiaries by the FAA.  None of Parent, the Borrower or any of the Borrower’s Subsidiaries has received any notice from the FAA, or is aware of any other event or circumstance, that would be reasonably likely to impair the Slots or the value thereof.

 

5.20 Representations and Warranties as to Collateral.  (a)  Each Loan Party’s exact legal name, as defined in Section 9-503(a) of the Uniform Commercial Code, is correctly set forth in Schedule 5.20(a)(1) hereto.  Each Loan Party has only the trade names, domain names and marks listed on Schedule B of the Intellectual Property Security Agreement.  Each Loan Party is located (within the meaning of section 9-307 of the Uniform Commercial Code) and has its chief executive office in the state or jurisdiction set forth in Schedule 5.20(a)(1) hereto.  The information set forth in Schedule 5.20(a)(1) hereto with respect to each Loan Party is true and accurate in all respects.  Except as set forth in Schedule 5.20(a)(1), no Loan Party has previously changed its name, location, chief executive office, type of organization, jurisdiction of organization or organizational identification number during the 5 years preceding the execution of this Agreement from those set forth in Schedule 5.20(a)(1) hereto except as disclosed in Schedule 5.20(a)(2) hereto.

 

(b) Each Loan Party is the legal and beneficial owner of the Collateral of such Loan Party free and clear of any Lien of others, except for Permitted Liens.

 

(c) Except for possessory interests of landlords and warehousemen, each Loan Party has exclusive possession and control of the Equipment.  In the case of Equipment located on leased premises or in warehouses, no lessor or warehouseman of any premises or warehouse upon or in which such Equipment is located has (i) issued any warehouse receipt or other receipt in the nature of a warehouse receipt in respect of any Equipment, (ii) to the best knowledge of any Loan Party, issued any document for any of any Loan Party’s Equipment and (iii) to the best knowledge of any Loan Party, received notification of any secured party’s interest (other than the security interest granted hereunder) in any Loan Party’s Equipment.

 

(d) The Pledged Equity of any Subsidiary of any Loan Party pledged by each Loan Party hereunder has been duly authorized and validly issued and is fully paid and non-assessable, except in the case of any Wisconsin corporation, subject to personal liability which may be imposed on shareholders by former Section 180.0622(2)(b) of the Wisconsin Business Corporation Law for debts incurred prior to June 14, 2006 (for debts incurred on or after such date, such Section has been repealed).  If any Loan Party is an issuer of Pledged Equity, such Loan Party confirms that it has received notice of such security interest.

 

(e) The Pledged Equity of any Subsidiary of any Loan Party pledged by each Loan Party constitutes the percentage of the issued and outstanding Equity Interests of the issuers thereof indicated on Schedule I hereto.  The Pledged Debt constitutes all of the outstanding indebtedness owed to each Loan Party by the issuers thereof and, as of the Amendment and Restatement Effective Date, is outstanding in the principal amount indicated on Schedule II hereto.

 

5.21 Indebtedness and Guaranteed Indebtedness.  All Indebtedness and Guaranteed Indebtedness outstanding as of the Amended and Restated Effective Date for each Loan Party (other than the Obligations) is described on Schedule 7.03.

 

5.22 Deposit Accounts.  Schedule 5.22 lists all banks and other financial institutions at which any Loan Party maintains deposit or other accounts in the United States, and such Schedule correctly identifies the name, address and telephone number of each depository, the name in which the account is held and the complete account number therefor.

So long as (i) any Lender shall have any Term Commitment hereunder, (ii) any Term Loan remains outstanding, (iii) any other Obligation (other than Airline Service Agreement Obligations outstanding after the Maturity Date) hereunder which is accrued and payable shall remain unpaid or unsatisfied or (iv) solely with respect to Sections 6.01, 6.05, 6.07, 6.10, 6.12, 6.13, 6.14, 6.15 6.16, 6.17 and 6.18, any Airline Service Agreement Obligations shall remain outstanding prior to the Airline Service Agreement Termination Date, Parent and the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each Loan Party to:

 

6.01 Financial Statements.  Deliver to the Administrative Agent and each Lender, in form and detail reasonably satisfactory to the Administrative Agent:

 

(a) as soon as available, but in any event within 90 days after the end of each fiscal year of the Parent, a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing acceptable to the Administrative Agent and each Significant Lender, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be qualified in any material respect except with respect to a “going concern” or like qualification or exception;

 

(b) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent, a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Parent’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by the Chief Executive Officer or the Chief Financial Officer of the Parent as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of the Parent and its Subsidiaries in accordance with GAAP, subject only to normal year end audit adjustments and the absence of footnotes;

(c) as soon as available, but in any event within 30 days after the end of each month, other than the third month of any fiscal quarter, a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal month, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal month and for the portion of the Parent’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal month of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by the Chief Executive Officer or the Chief Financial Officer of the Parent as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of the Parent and its Subsidiaries in accordance with GAAP, subject only to normal year end audit adjustments and the absence of footnotes; and

 

(d) (i) as soon as available, but no more than five (5) Business Days after the end of each calendar week a cash balance report for such calendar week, which report shall show, among other things, the aggregate amount of cash and Cash Equivalents that any of the Loan Parties has unrestricted access to on each day of such calendar week, and the aggregate amount of cash that the Loan Parties are restricted from accessing on each day of such calendar week and (ii) a flash cash report as of the day preceding such report.

 

6.02 Certificates; Other Information.  Deliver to the Administrative Agent and each Lender, in form and detail reasonably satisfactory to the Administrative Agent and each Significant Lender:

 

(a) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party, or any audit of any of them;

 

(b) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to any other clause of this Section 6.02;

 

(c) promptly after the assertion or occurrence thereof, notice of any Environmental Action against or of any noncompliance by any Loan Party with any Environmental Law or Environmental Permit that could reasonably be expected to have a Material Adverse Effect.

 

(d) promptly, such additional information regarding the business, financial or corporate affairs of any Loan Party, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request; and

 

(a) of the occurrence of any Default;

 

(b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect;

 

(c) of the occurrence of any ERISA Event;

 

(d) of the occurrence of any event for which the Borrower is required to make a mandatory repayment pursuant to Section 2.02(b);

 

(e) of a breach of the Use or Lose Rule; and

 

(f) of any material setoff, claims (including with respect to material environmental claims), withholdings or other defenses to which any of the Collateral, or any of the Agents’ or the Lenders’ rights with respect to the Collateral, in any material respect, are subject.

6.04 Payment of Obligations.  Pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided that no such tax, assessment, charge or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (i) such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor and (ii) such proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such charge or claim.

 

6.05 Preservation of Existence, Etc.  (a)  Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.05 or 7.06; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

 

6.06 Maintenance of Properties.  (a)  Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

 

6.07 Maintenance of Insurance.  Maintain with financially sound and reputable insurance companies not Affiliates of the Borrower (other than Cardinal Insurance Company, Cayman Ltd.), insurance or reinsurance in accordance with the terms of the Collateral Documents and otherwise with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons and providing for not less than 30 days’ prior notice to the Collateral Agent of termination, modification, lapse or cancellation of such insurance or reinsurance.  Each such policy of insurance shall (a) name the Collateral Agent for the benefit of the Lenders as an additional insured thereunder as its interests may appear and (b) in the case of each business interruption and casualty insurance policy, contain a loss payable clause or endorsement, satisfactory in form and substance to Collateral Agent and each Significant Lender, that names Collateral Agent for the benefit of Lenders as the loss payee thereunder for any covered loss.

6.08 Compliance with Laws.  Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.09 Books and Records.  (a)  Maintain proper books of record and account, in which full, true and correct entries consistent with GAAP shall be made of all financial transactions and matters involving the assets and business of the Parent and its Subsidiaries; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Parent and its Subsidiaries.

 

6.10 Inspection Rights.  Permit representatives and independent contractors of the Administrative Agent and the Collateral Agent and representatives of each Lender, at the expense of the Borrower, to visit and inspect any of its properties, to inspect the Collateral, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants (with the Borrower having the right to have a representative present at all such communications) and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default exists the Administrative Agent, Collateral Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

 

6.11 Use of Proceeds.  Use the proceeds of the Term Loans to provide general working capital and to pay ordinary operating costs and expenses of the Loan Parties.

 

6.12 Further Assurances.  Promptly upon request by the Administrative Agent, the Collateral Agent or any Significant Lender (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, the Collateral Agent or any Lender may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

6.13 Compliance with Terms of Gate Leaseholds.  Make all payments and otherwise perform all obligations in respect of all leases of real property (including, without limitation, arrangements with respect to airport gate leaseholds to which the Borrower or any of its Subsidiaries is a party), to the extent necessary to keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, notify the Administrative Agent and each Significant Lender of any default by any party with respect to such leases and cooperate with the Administrative Agent and each Significant Lender in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

6.14 Cash Management System; Controlled Accounts; Initial Drawing.  Maintain and cause each of its Subsidiaries to maintain (a) a cash management system reasonably acceptable to the Administrative Agent, the Collateral Agent and each Significant Lender (provided that, in the event the cash management system in place as of the Amendment and Restatement Effective Date is deemed after the Amendment and Restatement Effective Date to be unacceptable to the Administrative Agent, the Collateral Agent or any Significant Lender, then the Borrower and its Subsidiaries shall be provided a reasonable period of time to modify such cash management system to satisfy the requirements of the Administrative Agent, the Collateral Agent and each Significant Lender) and (b) all cash in Controlled Accounts (except to the extent held in accounts not at any time having an aggregate balance in excess of $200,000); provided that  to the extent consistent with agreements with the Processing Bank and American Express, the Loan Parties shall be permitted to hold accounts that are not Controlled Accounts with U.S. Bank National Association so long as the amounts on deposit in such accounts are intended solely to cash collateralize holdback obligations and other obligations in connection with payments of credit card processing or clearinghouse services to the Processing Bank.  The foregoing notwithstanding, the Loan Parties shall maintain all proceeds of the Term Loans in the Special Controlled Account except for (i) proceeds of Term Loans used to fund operating expenses in the ordinary course of business and (ii) proceeds of Term Loans used to fund payroll and disbursement accounts so long as the funds transferred from the Special Controlled Account are used within one (1) Business Day of the transfer thereof to satisfy payroll and disbursement obligations, as applicable.

 

6.15 FAA and DOT Matters; Citizenship.  (a) possess and maintain, and cause each other Loan Party to possess and maintain, all necessary franchises, licenses, permits, rights, concessions, authorizations and consents which are material to the operation of the routes flown by it and the conduct of its business and operations as currently conducted except in any case described in this clause (a), where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect and (b) solely with respect to the Borrower, (i) maintain at all times its status at the DOT, as applicable, as an “air carrier” within the meaning of Section 40102(a)(2) of Title 49, and hold a certificate under Section 41102(a)(1) of Title 49, or a commuter air carrier authorization, as applicable; (ii) at all times hereunder be a citizen of the United States as defined by Section 40102(a)15 of Title 49 and as that statutory provision has been interpreted by the DOT pursuant to its policies; and (iii) maintain at all times its status at the FAA as an air carrier and hold air carrier operating certificates and other operating authorizations issued by the FAA pursuant to 14 C.F.R. Sections 119, 121 or 135 as currently in effect or as may be amended or recodified from time to time.

 

6.16 Slot Utilization.  Each Loan Party shall utilize its Slots in a manner that does not breach, violate, or conflict with the Use or Lose Rule or result in the loss of any Slot under the Use or Lose Rule.

 

6.17 Gate Utilization.  Utilize all of its airport gate leaseholds in a manner sufficient to comply with applicable lease provisions governing such airport gate leaseholds.

 

6.18 Cape Town Convention.  With respect to the Cape Town Convention which has been ratified by, and is in full force and effect in the United States of America, the parties hereto hereby agree to permit the interests created under the Loan Documents to constitute International Interests under the Cape Town Convention. Upon request by the Administrative Agent or any Significant Lender, the Borrower at its own cost and expense shall from time to time do or cause to be done any and all acts and things (other than acts and things under the control of the Collateral Agent) which may be required or desirable (in the opinion of Collateral Agent or any Significant Lender) to ensure that each of the Secured Parties has the full benefit of the Cape Town Convention in connection with any Airframes and Engines, including:

 

(a) any matters connected with registering, perfecting, preserving and/or enhancing any International Interest vested in the Secured Parties with respect to any Airframes and Engines and constituted by the Loan Documents;

 

(b) entry in to agreements (subordination or otherwise) to protect and/or enhance and/or, improve the priority of any International Interest referred to in the foregoing paragraph;

 

(c) excluding, in writing, the application of any provisions of the Cape Town Convention that the Collateral Agent may deem desirable in connection with the foregoing; and

 

(d) if any subsequent action taken by any party, including any permitted sublease or re-registration of any Airframes or Engines, gives rise to a new International Interest under the Cape Town Convention, registering such interest with the International Registry (as such term is defined in the Cape Town Convention) with the consent of the Collateral Agent, any Significant Lender, or any duly authorized agent thereof, and any other party hereto as necessary to complete such registration.

 

6.19 Payment of Taxes.  Each Loan Party shall pay and discharge or cause to be paid and discharged promptly all taxes payable by it, including taxes imposed upon it, its income and profits, or any of its operations, its property (real, personal or mixed) and all taxes with respect to tax, social security and unemployment withholding with respect to its employees, before any thereof shall become past due, except in each case, (i) to the extent such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (x) such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor and (y) such proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such taxes or (ii) where the failure to pay or discharge such taxes would not result in aggregate liabilities in excess of $1,000,000.

7.01 Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, or sign or file or suffer to exist under the Uniform Commercial Code of any jurisdiction a financing statement that names Parent, the Borrower or any of the Borrower’s Subsidiaries as debtor, or sign or suffer to exist any security agreement authorizing any secured party thereunder to file such financing statement, or assign any accounts or other right to receive income, other than the following:

 

(a) Liens pursuant to any Loan Document;

 

(b) Liens existing on the Initial Closing Date and set forth on Schedule 7.01;

 

(c) Liens for taxes, assessments or governmental charges or claims not delinquent or which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

 

(d) Liens of landlords, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue or which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

 

(e) Liens incurred or pledges or deposits in the ordinary course of business made in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

 

(f) Liens incurred or deposits made to secure the performance of tenders, bids, trade contracts, leases (real and personal) (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance and return of money (but not borrowed money) bonds, reimbursement obligations and chargeback rights of Persons performing credit card processing services for a Loan Party and other obligations of a like nature incurred in the ordinary course of business;

 

(g) easements, rights-of-way, restrictions, minor defects, encroachments or irregularities of title and other similar charges or encumbrances affecting real property which do not materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

 

(h) Liens securing judgments and attachments not constituting an Event of Default under Section 8.01(g) or securing appeal or other surety bonds related to such judgments;

 

(i) operating leases or subleases of real or personal property granted to others not interfering in any material respect with the business of the Loan Parties, taken as a whole;

 

(j) Liens in favor of collecting or payor banks and credit card processors having a right of setoff, revocation, refund or chargeback with respect to money or instruments of any Loan Party on deposit with or in possession of such bank; and

 

(k) Liens securing Indebtedness permitted under Section 7.03(c)(v).

 

7.02 Investments.  Make or hold any Investments, except:

 

(a) Investments held by any Loan Party in the form of Cash Equivalents;

 

(b) equity Investments of the Borrower in any Guarantor and Investments of any Guarantor in the Borrower or in another Guarantor;

 

(c) Investments in accounts, contract rights and chattel paper (each as defined in the UCC), notes receivable and similar items arising or acquired in the ordinary course of business and Investments received in settlement of amounts due to any Loan Party effected in the ordinary course of business (including as a result of Dispositions not prohibited by Section 7.06);

 

(d) Guarantees permitted by Section 7.03;

 

(e) Investments (other than Cash Equivalents) existing on the Initial Closing Date and set forth on Schedule 5.13 hereof; and

 

(f) Investments consisting of intercompany debt permitted under Section 7.03.

 

7.03 Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a) in the case of the Borrower, Indebtedness owed to a Guarantor; provided that any such Indebtedness (i) shall be subordinated to the Obligations on terms satisfactory to the Administrative Agent and each Significant Lender, (ii) a Lien on all such Indebtedness shall have been granted to Collateral Agent for the benefit of Lenders, and (iii) such Indebtedness shall be evidenced by a promissory note or other instrument and such promissory note or instrument shall have been pledged and delivered to the Collateral Agent;

 

(i) Indebtedness under the Loan Documents;

 

(ii) Existing Indebtedness;

 

(iii) Indebtedness incurred after the Initial Closing Date consisting of Guarantees permitted by Section 7.04;

 

(iv) Indebtedness consisting of rent deferrals under aircraft leases;

 

(v) Indebtedness in respect of aircraft leases entered into with Republic and contemplated by the Business Plan;

 

(vi) Indebtedness incurred by any Loan Party to any TPG Entity in connection with the financing by such TPG Entity of payments due by the Borrower under the Airline Service Agreement; provided that such Indebtedness is not secured by any Lien on the Collateral; and

 

(vii) Indebtedness incurred in the ordinary course of business in connection with letters of credit or surety bonds required by Law or third parties in connection with the Loan Parties’ operations.

 

7.04 Guarantees and Other Liabilities.  Purchase or repurchase (or agree, contingently or otherwise, so to do) the Indebtedness of, or assume, guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance of any obligation or capability of so doing, or otherwise), endorse or otherwise become liable, directly or indirectly, in connection with the Indebtedness, stock or dividends of any Person, except (a) for any guaranty of Indebtedness or other obligations of the Borrower or any Guarantor if the Borrower or such Guarantor could have incurred such Indebtedness or obligations under this Agreement, (b) by endorsement of negotiable instruments for deposit or collection in the ordinary course of business, (c) customary indemnities in favor of officers, employees, directors, consultants, attorneys, accountants or other advisors, (d) guarantees of Obligations or Secured Credit Obligations under the Loan Documents and the Reimbursement Agreement and (e) guarantees of Indebtedness permitted under Section 7.03(c)(v).

 

7.05 Fundamental Changes.  Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person.

 

7.06 Dispositions.  Make any Disposition of Collateral, except:

 

(a) Dispositions of unused, obsolete or worn out property and surplus aircraft, engines and parts related thereto, whether now owned or hereafter acquired, in the ordinary course of business;

 

(b) Dispositions of inventory in the ordinary course of business (which, for the avoidance of doubt shall not include the assets set forth on Schedule 7.06 or any Spare Parts related thereto);

 

(c) abandonment of Intellectual Property Collateral pursuant to Section 10.04;

 

(d) licensing and sublicensing of Intellectual Property Collateral consistent with the Borrower’s past practices in the ordinary course of business;

 

(e) Dispositions of the assets set forth on Schedule 7.06 and any Spare Parts related thereto;

 

(f) So long as no Event of Default shall occur and be continuing, and (i) with respect to any replacements of Slots, subject to the satisfaction of the terms and conditions of Section 6(d) of the Slot Security Agreement, and (ii) with respect to any trades (or similar arrangements) with respect to Slots, subject to the satisfaction the terms and conditions of Section 6(b) of the Slot Security Agreement, the Loan Parties may transfer Slots in exchange for other Slots (and no other consideration);  provided, however, that any Disposition pursuant to this Section 7.06 shall be for fair market value.

7.07 Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests or accept any capital contributions, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

 

(a) each Loan Party (other than the Borrower) may make Restricted Payments to any Loan Party which is its direct parent;

 

(b) each Loan Party may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

 

(c) any Loan Party may issue Equity Interests, or make capital contributions, to another Loan Party and Parent may accept capital contributions;

 

(d) Borrower may make Restricted Payments to Parent to enable Parent to pay taxes which are due; and

 

(e) Borrower may make Restricted Payments to Parent to enable Parent to make compensation and indemnification payments owing to directors and officers of Parent.

 

7.08 Change in Nature of Business.  Engage in any line of business different from those lines of business conducted by the Borrower and its Subsidiaries on the Initial Closing Date.

 

7.09 Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Loan Party as would be obtainable by the Borrower or such Loan Party at the time in a comparable arm’s length transaction with a Person other than an Affiliate, provided that the foregoing restriction shall not apply to (a) transactions between or among the Borrower and any of the Guarantors or between and among any of the Guarantors; (b) reasonable and customary fees and compensation paid to, and indemnity provided on behalf of, officers, directors or employees of any Loan Party; (c) any Restricted Payments not prohibited by Section 7.07; (d) any payments or other distributions by a Subsidiary to its direct or indirect parent to enable such parent to pay its liabilities for taxes attributable to such Subsidiary; and (e) the Loan Documents and the transactions contemplated thereby.

 

7.10 Use of Proceeds.  Use the proceeds of any Term Loan, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund Indebtedness originally incurred for such purpose.

 

7.11 Amendments of Organization Documents.  Amend any of its Organization Documents.

 

7.12 Changes in Fiscal Year.  Make any change in fiscal year.

7.13 Prepayments, Etc. of Indebtedness.  Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Indebtedness, except for the prepayment of the Term Loans and the Reimbursement Obligations in accordance with the terms of this Agreement.

 

7.14 Partnerships, Etc.  Become a general partner in any general or limited partnership or joint venture.

 

7.15 Speculative Transactions.  Engage in any transaction involving any Swap Contract, except Swap Contracts relating to fuel in accordance with the Loan Parties’ current business practice or as contemplated by Section 4.02.

 

7.16 Formation of Subsidiaries.  Organize or invest in any new Subsidiary.

 

7.17 Change in Capital Structure.  Make any material change in its equity capital structure as in existence on the Initial Closing Date.

 

7.18 Repayments of Reimbursement Obligations.  Make any repayment in respect of Reimbursement Obligations except (x) to the extent set forth in Subsections 2.02(b)(i) through 2.02(b)(iv) or (y) concurrently with a prepayment of the Term Loans as set forth in Section 2.02(b)(v).

 

7.19 Amendments to Reimbursement Agreement.  Make any amendment, supplement, modification or any other change to the Reimbursement Agreement in a manner that is adverse to the interests of any Lender or any Agent under any Loan Document without the prior written consent of the Required Lenders.

 

7.20 Sales and Leasebacks.  Enter into any arrangement with any Person providing for the leasing by any Loan Party of real or personal property that has been or is to be sold or transferred by such Loan Party to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Loan Party.

 

7.21 Negative Pledge Clauses.  Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Loan Party to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, to secure its obligations under the Loan Documents to which it is a party other than (a) this Agreement and the other Loan Documents and the Reimbursement Documents and (b) any agreements governing any purchase money Liens or Capital Lease Obligations not prohibited hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby).

 

7.22 Clauses Restricting Subsidiary Distributions.  Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, any Loan Party, (b) make loans or advances to, or other Investments in, any Loan Party or (c) transfer any of its assets to any Loan Party, except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Loan Documents and the Reimbursement Documents and (ii) 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 Capital Stock or assets of such Subsidiary.

8.01 Events of Default.  Any of the following shall constitute an Event of Default:

 

(a) Non-Payment.  The Borrower or any other Loan Party fails to pay when and as required to be paid herein, any amount of principal of, or interest on, any Term Loan, or when and as the same becomes due, any other amount payable hereunder or under any other Loan Document; or

 

(b) Specific Covenants.  The Borrower fails to perform or observe any term, covenant or agreement contained in any of Sections 6.03, 6.05, 6.07, 6.10, 6.11, 6.14, 6.15, 6.16, 6.17 or 6.18, or Article VII; or

 

(c) Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues unremedied for five (5) Business Days after the earlier of the date on which (A) a Responsible Officer becomes aware of such failure or (B) written notice thereof shall have been given to the Borrower by the Administrative Agent, the Collateral Agent or any Lender; or

 

(d) Representations and Warranties.  Any representation, warranty, certification or statement of fact made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made; or

 

(e) Cross-Default on Indebtedness and Swap Contracts.  (i) Any event shall have occurred that permits any holder or holders (or a trustee or agent on behalf of such holder or holders) of Indebtedness (other than Indebtedness hereunder and other than the Indebtedness listed on Schedule 5.02) to demand the payment of such Indebtedness prior to its stated maturity, or cash collateral in respect thereof; or (ii) with respect to any Indebtedness in an amount greater than $1,000,000, any Loan Party or any Subsidiary fails to repay such Indebtedness, in full, at or prior to the scheduled maturity thereof; or (iii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any other Loan Party or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any other Loan Party or any Subsidiary is an Affected Party (as defined in such Swap Contract) and, in either event, the Swap Termination Value owed by the Loan Party or such Subsidiary as a result thereof is greater than $1,000,000; or

 

(f) Judgments.  There is entered against any Loan Party or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount exceeding $1,000,000 (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of such claim and does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, there is a period of five (5) consecutive Business Days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(g) ERISA.  An ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other such ERISA Events, could reasonably be expected to result in liability of Parent and its ERISA Affiliates in an aggregate amount exceeding $1,000,000; or

(h) Invalidity of Loan Documents.  Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be valid and binding on or enforceable against any Loan Party intended to be a party to it; any Loan Party files a motion or other pleading seeking to challenge the validity of any Loan Document or the applicability or enforceability of any Loan Document or which seeks to void, avoid, limit, or otherwise adversely affect the security interest created by or in any Loan Document or any payment made pursuant thereto; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

 

(i) Change of Control.  There occurs any Change of Control; or

 

(j) Collateral Document.  Any Collateral Document after delivery thereof (other than pursuant to the terms thereof) ceases to create a valid and perfected lien on and security interest in the Collateral purported to be covered thereby having the priority contemplated by the Loan Documents; or

 

(k) Material Adverse Effect.  There occurs any event or circumstance that would give rise to a Material Adverse Effect since the Amendment and Restatement Effective Date; or

 

(l) Change in Business.  The Borrower and its Subsidiaries cease to operate their business as conducted on the date hereof or cease to operate flights substantially in accordance with the flight schedule of the Borrower and its Subsidiaries as of the Initial Closing Date (other than to the extent contemplated in the Airline Service Agreement); or

 

(m) Involuntary Proceedings.  An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of Parent, the Borrower or any Subsidiary, or of a substantial part of the property or assets of Parent, the Borrower or a Subsidiary, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Parent, the Borrower or any Subsidiary or for a substantial part of the property or assets of Parent, the Borrower or a Subsidiary or (iii) the winding-up or liquidation of Parent, the Borrower or any Subsidiary; or

 

(n) Voluntary Proceedings.  Parent, the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in (m) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Parent, the Borrower or any Subsidiary  or for a substantial part of the property or assets of Parent, the Borrower or any Subsidiary, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due (other than with respect to Indebtedness described on Schedule 5.02); or

 

(o) Reimbursement Agreement Cross Default.  Any “Event of Default” under the Reimbursement Agreement has occurred and is continuing; or

 

(p) Cross Default on Airline Service Agreement.  Any (i) default under the Airline Service Agreement which permits Republic to terminate the Airline Service Agreement (pursuant to Section 8.02(c) or 5.03 of the Airline Service Agreement) or (ii) an Airline Service Agreement Rejection Event has occurred and is continuing; or

 

(q) Midwest Air LLC Agreement .  The Borrower or any Subsidiary shall engage in any transaction or take any action that would violate the terms of Section 3.2 of the Midwest Air LLC Agreement.

 

8.02 Remedies upon Event of Default.  (a) Upon the occurrence of any Event of Default described in Section 8.01(m) or (n) above, automatically, and upon the occurrence and during the continuance of any other Event of Default, at the request of the Required Lenders:

 

(i) the commitment of each Lender to make Term Loans shall immediately terminate;

 

(ii) the unpaid principal amount of all outstanding Term Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document shall be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; and

 

(iii)  the Administrative Agent shall exercise on behalf of the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable laws; provided that remedies in respect of the Collateral shall only be exercised pursuant to and in the manner set forth in Section 8.02(b).

 

(b) Upon the occurrence and during the continuance of any Collateral Enforcement Event of Default, the Collateral Agent (subject to the consent, and at the direction, of the Required Secured Parties) shall exercise on behalf of the Secured Parties all rights and remedies available to it in respect of the Collateral under the Secured Credit Documents or applicable Laws.

 

8.03 Application of Funds.  After the exercise of remedies provided for in Section 8.02 or upon the commencement of any case or proceeding under any Debtor Relief Law, any amounts received on account of any Secured Credit Obligations from or with respect to the Collateral or any enforcement proceedings with respect thereto shall be applied by the Collateral Agent in the following order:

 

First, to payment of that portion of the Secured Credit Obligations constituting fees, indemnities, expenses and other amounts (including Attorney Costs) payable to the Administrative Agent and the Collateral Agent in their capacities as such;

 

Second, to payment of that portion of the Secured Credit Obligations constituting amounts payable under Article III of this Agreement and Article III of the Reimbursement Agreement ratably among the Northwest Parties and the Lenders in proportion to the amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Secured Credit Obligations constituting Reimbursement Obligations up to a maximum principal amount of $10,000,000 (whether currently owing or contingent) and any accrued and unpaid interest thereon (less the sum (without duplication) of (i) the amount of any portion thereof that has been cash collateralized pursuant to this Agreement or the Reimbursement Agreement and (ii) the amount of funds on deposit in the Reimbursement Obligation Collateral Account at such time prior to giving effect to the release of such funds pursuant to the penultimate sentence of the last paragraph in this Section 8.03), principal on the Term Loans up to a maximum principal amount of $50,000,000 (whether currently due and payable or not), and accrued and unpaid interest on the Term Loans, ratably among the Northwest Parties and the Lenders in proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to the payment of all other Secured Credit Obligations of the Loan Parties owing under or in respect of the Secured Credit Documents on such date (including any Reimbursement Obligations in excess of a principal amount of $10,000,000 (whether currently owing or contingent) and any accrued and unpaid interest thereon less the sum (without duplication) of (i) the amount of any portion thereof that has been cash collateralized pursuant to this Agreement or the Reimbursement Agreement and (ii) the amount of funds on deposit in the Reimbursement Obligation Collateral Account at such time prior to giving effect to the release of such funds pursuant to the penultimate sentence of the last paragraph in this Section 8.03), ratably among the Northwest Parties and the Lenders in proportion to the respective amounts described in this clause Fourth payable to them;

 

Fifth, to the payment of all Airline Service Agreement Obligations that are unpaid and outstanding on such date payable to Republic; and

 

Last, the balance, if any, after all of the Secured Credit Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

 

(a) Each Lender hereby irrevocably appoints, designates and authorizes the Administrative Agent and the Collateral Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent or the Collateral Agent, as the case may be, by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent and the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent or the Collateral Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent or the Collateral Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the other Loan Documents with reference to the Administrative Agent or the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

(b) The Collateral Agent shall act as the “collateral agent” under the Loan Documents, and each of the Lenders (in its capacities as a Lender (if applicable)) hereby irrevocably appoints and authorizes the Collateral Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Credit Obligations, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Collateral Agent (and any co-agents, sub-agents and attorneys-in-fact appointed by the Collateral Agent pursuant to Section 9.02 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Collateral Agent), shall be entitled to the benefits of all provisions of this Article IX (including, without limitation, Section 9.07, as though such co-agents, sub-agents and attorneys-in-fact were the “Collateral Agent” under the Loan Documents) as if set forth in full herein with respect thereto.

 

9.02 Delegation of Duties.  The Administrative and the Collateral Agent may execute any of its duties under this Agreement or any other Loan Document (including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder at the direction of the Administrative Agent and the Collateral Agent) by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties.  Neither the Administrative Agent nor the Collateral Agent shall be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.

 

9.03 Liability of Administrative Agent and Collateral Agent.  No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein as finally determined in a nonappealable judgment by a court of competent jurisdiction), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent or the Collateral Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or the perfection or priority of any Lien or security interest created or purported to be created under the Collateral Documents or the existence of any Liens or security interests in the Collateral, or for any failure of any Loan Party or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Affiliate thereof.

 

(a) The Administrative Agent and the Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants and other experts selected by the Administrative Agent and the Collateral Agent.  The Administrative Agent and the Collateral Agent shall 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 Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent and the Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

 

(b) For purposes of determining compliance with the conditions specified in Section 4.01 or Section 4.02, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Amendment and Restatement Effective Date specifying its objection thereto.

9.05 Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default and stating that such notice is a “notice of default”.  The Administrative Agent will notify the Lenders of its receipt of any such notice.  The Administrative Agent shall take such action with respect to such Default as may be directed by the Required Lenders in accordance with Article VIII; provided, however, that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable or in the best interest of the Lenders.

 

9.06 Credit Decision; Disclosure of Information by Administrative Agent and Collateral Agent.  Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent or the Collateral Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession.  Each Lender represents to the Administrative Agent and the Collateral Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder.  Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and the other Loan Parties.  Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person.

 

9.07 Indemnification of Administrative Agent and the Collateral Agent.  Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person’s own gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section.  In the case of any investigation, litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.07 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person.  Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent and the Collateral Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent or the Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower.  The undertaking in this Section shall survive termination of the Term Commitments, the payment of all other Obligations and the resignation of the Administrative Agent or the Collateral Agent.

(b) Successor Collateral Agent.  The Collateral Agent may resign as Collateral Agent upon 30 days’ notice to the Lenders.  If the Collateral Agent resigns under this Agreement, the Required Lenders shall appoint a successor collateral agent for the Lenders.  If no successor collateral agent is appointed prior to the effective date of the resignation of the Collateral Agent, the Collateral Agent may appoint, after consulting with the Lenders, a successor collateral agent from among the Lenders.  Upon the acceptance of its appointment as successor collateral agent hereunder, the Person acting as such successor collateral agent shall succeed to all the rights, powers and duties of the retiring Collateral Agent and the term “Collateral Agent” shall mean such successor collateral agent and the retiring Collateral Agent’s appointment, powers and duties as Collateral Agent shall be terminated, without any other or further act or deed on the part of any other Lender.  After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of this Article IX and Sections 12.04 and 12.05 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement.  Upon the acceptance of any appointment as Collateral Agent hereunder by a successor and upon the execution and filing or recording of such financing statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to continue the perfection of the Liens granted or purported to be granted by the Collateral Documents, such successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges, and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall be discharged from its duties and obligations under the Loan Documents.  If no Person agrees to be a successor Collateral Agent, the resigning Collateral Agent’s resignation shall be effective upon notice by the resigning Collateral Agent to the Lenders, and the Lenders shall assume the responsibilities of the Collateral Agent.   After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Collateral Agent.

10.01 Grant of Security.  To induce the Lenders to make the Term Loans and the Northwest Parties to make the extensions of credit described in the Reimbursement Agreement, each Loan Party hereby grants to the Collateral Agent, for itself and the ratable benefit of the Secured Parties, as security for the full and prompt payment when due of the Secured Credit Obligations of such Loan Party a continuing Lien and security interest in and to all Pledged Collateral of such Loan Party.  “Pledged Collateral” means all of the property and assets (other than the Excluded Assets and the Excluded Airline Assets) of each Loan Party and its estate, real and personal, tangible and intangible, whether now owned or hereafter acquired or arising and regardless of where located, including but not limited to:

 

(a) all equipment in all of its forms, including, without limitation, all machinery, tools, motor vehicles, vessels, aircraft, aircraft engines, aircraft propellers, furniture and fixtures, and all parts thereof and all accessions thereto and all software related thereto, including, without limitation, software that is embedded in and is part of the equipment (any and all such property being the “Equipment”);

 

(b) all inventory in all of its forms, including, without limitation, (i) all raw materials, work in process, finished goods and materials used or consumed in the manufacture, production, preparation or shipping thereof, (ii) goods in which such Loan Party has an interest in mass or a joint or other interest or right of any kind (including, without limitation, goods in which such Loan Party has an interest or right as consignee) and (iii) goods that are returned to or repossessed or stopped in transit by such Loan Party), and all accessions thereto and products thereof and documents therefore, and all software related thereto, including, without limitation, software that is embedded in and is part of the inventory (any and all such property being the “Inventory”);

 

(c) all accounts (including, without limitation, health-care-insurance receivables), chattel paper (including, without limitation, tangible chattel paper and electronic chattel paper), instruments (including, without limitation, promissory notes), deposit accounts, letter-of-credit rights, general intangibles (including, without limitation, payment intangibles, the American Express Agreement and the U.S. Bank Agreement) and other obligations of any kind, whether or not arising out of or in connection with the sale or lease of goods or the rendering of services and whether or not earned by performance, and all rights now or hereafter existing in and to all supporting obligations and in and to all security agreements, mortgages, Liens, leases, letters of credit and other contracts securing or otherwise relating to the foregoing property (any and all of such accounts, chattel paper, instruments, deposit accounts, letter-of-credit rights, general intangibles and other obligations, to the extent not referred to in clause (d), (e) or (f) below, being the “Receivables”, and any and all such supporting obligations, security agreements, mortgages, Liens, leases, letters of credit and other contracts to the extent not referred to in clause (d), (e) or (f) below being the “Related Contracts”);

(i) the Initial Pledged Equity and the certificates, if any, representing the Initial Pledged Equity, and all dividends, distributions, return of capital, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Initial Pledged Equity and all subscription warrants, rights or options issued thereon or with respect thereto and all rights with respect to such Initial Pledged Equity, including all rights to vote such Initial Pledged Equity or exercise rights under any partnership agreement, limited liability company agreement or similar agreement relating to Initial Pledged Equity;

 

(ii) the Initial Pledged Debt and the instruments, if any, evidencing the Initial Pledged Debt, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Initial Pledged Debt;

 

(iii) all additional shares of stock and other Equity Interests from time to time acquired by such Loan Party in any manner (such shares and other Equity Interests, together with the Initial Pledged Equity, being the “Pledged Equity”), and the certificates, if any, representing such additional shares or other Equity Interests, and all dividends, distributions, return of capital, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares or other Equity Interests and all subscription warrants, rights or options issued thereon or with respect thereto, and all rights to vote such Pledged Equity or exercise rights under any partnership agreement, limited liability company agreement or similar agreement relating to Pledged Equity; provided that no Loan Party shall be required to pledge any Equity Interest in any Subsidiary that is a CFC owned or otherwise held by such Loan Party which, when aggregated with all of the other shares of stock in such Subsidiary pledged by any Loan Party, would result in more than 66% of the shares of stock in such Subsidiary entitled to vote (within the meaning of Treasury Regulation Section 1.956-2(c)(2) promulgated under the Code) (the “Voting Foreign Stock”) (on a fully diluted basis) being pledged to the Collateral Agent, on behalf of the Secured Parties, under this Agreement (although all of the shares of stock in such Subsidiary not entitled to vote (within the meaning of Treasury Regulation Section 1.956-2(c)(2) promulgated under the Code) (the “Non-Voting Foreign Stock”) shall be pledged by each of the Loan Parties that owns or otherwise holds any such Non-Voting Foreign Stock therein); provided further that, if, as a result of any change in the tax laws of the United States of America after the date of this Agreement, the pledge by such Loan Party of any additional shares of stock in any such Subsidiary to the Collateral Agent, on behalf of the Secured Parties under this Agreement would not result in an increase in the aggregate net consolidated tax liabilities of the Borrower and its Subsidiaries, then, promptly after the change in such laws, all such additional shares of stock shall be so pledged under this Agreement;

 

(iv) all additional indebtedness from time to time owed to such Loan Party (such indebtedness, together with the Initial Pledged Debt, being the “Pledged Debt”) and the instruments, if any, evidencing such indebtedness, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such indebtedness; and

 

(v) all other investment property (including, without limitation, all (A) securities, whether certificated or uncertificated, (B) security entitlements, (C) securities accounts, (D) commodity contracts and (E) commodity accounts) in which such Loan Party has now, or acquires from time to time hereafter, any right, title or interest in any manner, and the certificates or instruments, if any, representing or evidencing such investment property, and all dividends, distributions, return of capital, interest, distributions, value, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such investment property and all subscription warrants, rights or options issued thereon or with respect thereto;

 

(e) the following (collectively, the “Account Collateral”):

 

(i) all deposit and other bank accounts and all funds and financial assets from time to time credited thereto (including, without limitation, all cash equivalents), all interest, dividends, distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such funds and financial assets, and all certificates and instruments, if any, from time to time representing or evidencing such accounts;

 

(ii) all promissory notes, certificates of deposit, deposit accounts, checks and other instruments from time to time delivered to or otherwise possessed by the Collateral Agent for or on behalf of such Loan Party, including, without limitation, those delivered or possessed in substitution for or in addition to any or all of the then existing Account Collateral; and

 

(iii) all interest, dividends, distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing Account Collateral;

 

(f) the following (collectively, the “Intellectual Property Collateral”):

 

(i) all patents, patent applications, utility models and statutory invention registrations, all inventions claimed or disclosed therein and all improvements thereto (“Patents”);

 

(ii) all trademarks, service marks, domain names, trade dress, logos, designs, slogans, trade names, business names, corporate names and other source identifiers, whether registered or unregistered (provided that no security interest shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law), together, in each case, with the goodwill symbolized thereby (“Trademarks”);

 

(iii) all copyrights, including, without limitation, copyrights in Computer Software, internet web sites and the content thereof, whether registered or unregistered (“Copyrights”);

 

(iv) all computer software, programs and databases (including, without limitation, source code, object code and all related applications and data files), firmware and documentation and materials relating thereto, together with any and all maintenance rights, service rights, programming rights, hosting rights, test rights, improvement rights, renewal rights and indemnification rights and any substitutions, replacements, improvements, error corrections, updates and new versions of any of the foregoing (“Computer Software”);

 

(v) all confidential and proprietary information, including, without limitation, know-how, trade secrets, manufacturing and production processes and techniques, inventions, research and development information, databases and data, including, without limitation, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information (collectively, “Trade Secrets”), and all other intellectual, industrial and intangible property of any type, including, without limitation, industrial designs and mask works;

 

(vi) all registrations and applications for registration for any of the foregoing, including, without limitation, those registrations and applications for registration set forth in Schedules A, B and C to the Intellectual Property Security Agreement (as such Schedules may be supplemented from time to time by supplements to the IP Security Agreement, each such supplement being substantially in the form of Exhibit D-1 (an “IP Security Agreement Supplement”)), executed by such Loan Party to the Collateral Agent from time to time), together with all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations thereof;

 

(vii) all tangible embodiments of the foregoing, all rights in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world and all other rights of any kind whatsoever of such Loan Party accruing thereunder or pertaining thereto;

 

(viii) all agreements, permits, consents, orders and franchises relating to the license, development, use or disclosure of any of the foregoing to which such Loan Party, now or hereafter, is a party or a beneficiary (“IP Agreements”); and

 

(ix) any and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation, misuse or breach with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover, such damages;

 

(g) all books and records (including, without limitation, customer lists, credit files, printouts and other computer output materials and records) of such Loan Party pertaining to any of the Pledged Collateral; and

 

(h) all proceeds of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to, and supporting obligations relating to, any and all of the Pledged Collateral (including, without limitation, proceeds, collateral and supporting obligations that constitute property of the types described in clauses (a) through (g) of this Section 10.01 and this clause (h)) and, to the extent not otherwise included, all (A) payments under insurance (whether or not the Collateral Agent is the loss payee thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing Pledged Collateral, (B) tort claims, including, without limitation, all commercial tort claims and (C) cash.

 

For the avoidance of doubt, Excluded Assets and Excluded Airline Assets shall not constitute Pledged Collateral.

 

10.02 Further Assurances.

(b) Each Loan Party hereby authorizes the Collateral Agent to file one or more financing or continuation statements, and amendments thereto, including, without limitation, one or more financing statements indicating that such financing statements cover all assets or all personal property (or words of similar effect) of such Loan Party, in each case without the signature of such Loan Party, and regardless of whether any particular asset described in such financing statements falls within the scope of the Uniform Commercial Code or the granting clause of this Agreement.  A photocopy or other reproduction of this Agreement or any financing statement covering the Pledged Collateral or any part thereof shall be sufficient as a financing statement where permitted by Law.  Each Loan Party ratifies its authorization for the Collateral Agent to have filed such financing statements, continuation statements or amendments filed prior to the date hereof.

 

(c) Each Loan Party will furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Pledged Collateral of such Loan Party and such other reports in connection with such Pledged Collateral as the Collateral Agent or any Significant Lender may reasonably request, all in reasonable detail.

 

10.03 Rights of Lender; Limitations on Lenders’ Obligations.

 

(a)   Each Loan Party shall remain liable under the contracts and agreements included in such Loan Party’s Pledged Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed (including paying cure costs if such contracts or agreements are assumed), (ii) the exercise by the Collateral Agent of any of the rights hereunder shall not release any Loan Party from any of its duties or obligations under the contracts and agreements included in the Pledged Collateral, and (iii) no Secured Party shall have any obligation or liability under the contracts and agreements included in the Pledged Collateral by reason of this Agreement or any other Loan Document, nor shall any Secured Party be obligated to perform any of the obligations or duties of any Loan Party thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

 

(b) Except as otherwise provided in this subsection (b), each Loan Party will continue to collect, at its own expense, all amounts due or to become due such Loan Party under the Receivables and Related Contracts.  In connection with such collections, such Loan Party may take (and, at the Collateral Agent’s direction, will take) such action as such Loan Party or the Collateral Agent may reasonably deem necessary or advisable to enforce collection of the Receivables and Related Contracts; provided, however, that, subject to any requirement of notice provided in Section 8.02, the Collateral Agent shall have the right at any time, upon the occurrence and during the continuance of a Collateral Enforcement Event of Default, to notify the obligors under any Receivables and Related Contracts of the assignment of such Receivables and Related Contracts to the Collateral Agent and to direct such obligors to make payment of all amounts due or to become due to such Loan Party thereunder directly to the Collateral Agent and, upon such notification and at the expense of such Loan Party, to enforce collection of any such Receivables and Related Contracts, to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Loan Party might have done, and to otherwise exercise all rights with respect to such Receivables and Related Contracts, including, without limitation, those set forth in Section 9-607 of the Uniform Commercial Code.  Upon and during the exercise by the Collateral Agent on behalf of the Lenders of any of the remedies described in the proviso of the immediately preceding sentence, (i) any and all amounts and proceeds (including, without limitation, instruments) received by such Loan Party in respect of the Receivables and Related Contracts of such Loan Party shall be received in trust for the benefit of the Collateral Agent hereunder, shall be segregated from other funds of such Loan Party and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary indorsement) to be deposited in a collateral account maintained with the Collateral Agent and applied as provided in Section 10.07(b) and (ii) such Loan Party will not adjust, settle or compromise the amount or payment of any Receivable or amount due on any Related Contract, release wholly or partly any obligor thereof, or allow any credit or discount thereon.  No Loan Party will permit or consent to the subordination of its right to payment under any of the Receivables and Related Contracts to any other indebtedness or obligations of the obligor thereof.

 

(c) The Collateral Agent shall have the right to make test verification of the Receivables in any manner and through any medium that it considers advisable in its reasonable discretion, and each Loan Party agrees to furnish all such assistance and information as the Collateral Agent may reasonably require in connection therewith.

 

10.04 Covenants of the Loan Parties with Respect to Pledged Collateral.  Each Loan Party hereby covenants and agrees with the Collateral Agent that from and after the date of this Agreement and until the Secured Credit Obligations (other than contingent indemnification obligations which are not then due and payable) are fully satisfied:

 

(a) Delivery and Control of Pledged Equity.

 

(i) All certificates or instruments representing or evidencing Pledged Equity shall be delivered to and held by or on behalf of the Collateral Agent pursuant hereto at the request of the Collateral Agent or any Significant Lender, and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Collateral Agent and each Significant Lender.

 

(ii) With respect to any Pledged Equity in which any Loan Party has any right, title or interest and that constitutes an uncertificated security, such Loan Party will cause the issuer thereof either (i) to register the Collateral Agent as the registered owner of such security or (ii) to agree in an authenticated record with such Loan Party and the Collateral Agent that such issuer will comply with instructions with respect to such security originated by the Collateral Agent without further consent of such Loan Party, such authenticated record to be in form and substance reasonably satisfactory to the Collateral Agent and each Significant Lender.  With respect to any Security Collateral in which any Loan Party has any right, title or interest and that is not an uncertificated security, upon the request of the Collateral Agent or any Significant Lender, such Loan Party will notify each such issuer of Pledged Equity that such Pledged Equity is subject to the security interest granted hereunder.

 

(iii) Except as provided in Section 10.07, such Loan Party shall be entitled to receive all cash dividends paid in respect of the Pledged Equity with respect to the Pledged Equity.

 

(iv) Except as provided in Section 10.07 and subject to Article VII, such Loan Party will be entitled to exercise all voting, consent and corporate rights with respect to the Pledged Equity.

 

(b) Maintenance of Records.  Such Loan Party will keep and maintain, at its own cost and expense, satisfactory and complete records of the Pledged Collateral, in all material respects, including, without limitation, a record of all payments received and all credits granted with respect to the Pledged Collateral and all other dealings concerning the Pledged Collateral in each case in accordance with its normal business practice.

 

(c) Indemnification with Respect to Pledged Collateral.  In any suit, proceeding or action brought by the Collateral Agent relating to any Pledged Collateral for any sum owing thereunder or to enforce any provision of any Pledged Collateral in each case, brought by the Collateral Agent in accordance with this Agreement, such Loan Party will save, indemnify and keep the Secured Parties harmless from and against all expense, loss or damage suffered by the Secured Parties by reason of any defense, setoff, counterclaim, recoupment or reduction of liability whatsoever of the obligor thereunder, arising out of a breach by such Loan Party of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to, or in favor of, such obligor or its successors from such Loan Party, and all such obligations of such Loan Party shall be and remain enforceable against and only against such Loan Party and shall not be enforceable against the Collateral Agent.

 

(d) Limitation on Liens on Pledged Collateral.  Such Loan Party will defend the Pledged Collateral against and take such other action as is necessary to remove, any Lien on the Pledged Collateral except Liens permitted under Section 7.01 and will defend the right, title and interest of the Collateral Agent in and to all of such Loan Party’s rights under the Pledged Collateral against the claims and demands of all Persons whomsoever other than claims or demands arising out of Liens permitted under Section 7.01.

 

(e) Limitations on Modifications of Receivables.  Except with respect to intercompany Receivables among the Loan Parties, such Loan Party will not, without the Collateral Agent’s prior written consent, grant any extension of the time of payment under or in respect of any of the Receivables or Related Contracts, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any Person liable for the payment thereof, or allow any credit or discount whatsoever thereon other than any of the foregoing which are done in the ordinary course of business, consistent with past practices, and trade discounts granted in the ordinary course of business of such Loan Party.

 

(f) Notices.  Such Loan Party will advise the Collateral Agent promptly after it obtains knowledge thereof, in reasonable detail, (i) of any Lien asserted against any of the Pledged Collateral other than Liens permitted under Section 7.01, and (ii) of the occurrence of any other event which would result in a material adverse change with respect to the aggregate value of the Pledged Collateral or on the security interests created hereunder.

 

(g) Maintenance of Equipment.  Such Loan Party will keep and maintain the Equipment in good operating condition sufficient for the continuation of the business conducted by such Loan Party on a basis consistent with past practices, ordinary wear and tear excepted.

 

(h) As to Intellectual Property Collateral.

 

(i) With respect to each item of its Intellectual Property Collateral, each Loan Party agrees to take, at its expense, all necessary steps, including, without limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office and any other applicable U.S. Governmental Authority, to (A) maintain the validity and enforceability of such Intellectual Property Collateral and maintain such Intellectual Property Collateral in full force and effect, and (B) pursue the registration and maintenance of each patent, trademark, or copyright registration or application, now or hereafter included in such Intellectual Property Collateral of such Loan Party, including, without limitation, the payment of required fees and taxes, the filing of responses to office actions issued by the U.S. Patent and Trademark Office, the U.S. Copyright Office or other applicable U.S. Governmental Authorities, the filing of applications for renewal or extension, the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing of divisional, continuation, continuation-in-part, reissue and renewal applications or extensions, the payment of maintenance fees and the participation in interference, reexamination, opposition, cancellation, infringement and misappropriation proceedings.  No Loan Party shall, without the written consent of the Collateral Agent, discontinue use of or otherwise abandon any Intellectual Property Collateral, or abandon any right to file an application for patent, trademark, or copyright, unless such Loan Party shall have determined prior to such cessation of use or abandonment that such use or the pursuit or maintenance of such Intellectual Property Collateral is no longer desirable in the conduct of such Loan Party’s business and that the loss thereof would not be reasonably likely to have a Material Adverse Effect.

(ii) Each Loan Party agrees promptly to notify the Collateral Agent if such Loan Party becomes aware (A) that any material item of the Intellectual Property Collateral has become abandoned, placed in the public domain, invalid or unenforceable, or of any adverse determination or development regarding such Loan Party’s ownership of any of the material Intellectual Property Collateral or its right to register the same or to keep and maintain and enforce the same, or (B) of any adverse determination or the institution of any proceeding (including, without limitation, the institution of any proceeding in the U.S. Patent and Trademark Office or any court) regarding any material item of the Intellectual Property Collateral.

 

(iii) In the event that any Loan Party becomes aware that any item of the Intellectual Property Collateral that is material to such Loan Party’s business is being infringed or misappropriated by a third party, such Loan Party shall promptly notify the Collateral Agent and shall take such actions, at its expense, as such Loan Party or the Collateral Agent deems reasonable and appropriate under the circumstances to protect or enforce such Intellectual Property Collateral, including, without limitation, suing for infringement or misappropriation and for an injunction against such infringement or misappropriation.

 

(iv) Each Loan Party shall use proper statutory notice (where necessary) in connection with its use of each item of its Intellectual Property Collateral.  No Loan Party shall do or permit any act or knowingly omit to do any act whereby any of its Intellectual Property Collateral may lapse or become invalid or unenforceable or placed in the public domain except to the extent that it is commercially reasonable to do so.

 

(v) Each Loan Party shall take all reasonable steps which it or the Collateral Agent deems appropriate under the circumstances to preserve and protect each item of its Intellectual Property Collateral, including, without limitation, maintaining the quality of any and all products or services used or provided in connection with any of the Trademarks, consistent with the quality of the products and services as of the date hereof, and taking all steps necessary to ensure that all licensed users of any of the Trademarks use such consistent standards of quality.

 

(vi) Each Loan Party agrees that should it obtain an ownership interest in any item of the type set forth in Section 10.01(f) that is not on the date hereof a part of the Intellectual Property Collateral (“After-Acquired Intellectual Property”) (i) the provisions of this Agreement shall automatically apply thereto, and (ii) any such After-Acquired Intellectual Property and, in the case of trademarks, the goodwill symbolized thereby, shall automatically become part of the Intellectual Property Collateral subject to the terms and conditions of this Agreement with respect thereto.  Within three days of acquiring After-Acquired Intellectual Property, the Loan Party that acquired such After-Acquired Intellectual Property shall give prompt written notice to the Collateral Agent identifying the After-Acquired Intellectual Property acquired, and such Loan Party shall execute and deliver to the Collateral Agent with such written notice, or otherwise authenticate, an IP Security Agreement Supplement covering such After-Acquired Intellectual Property which shall be recorded with the U.S. Patent and Trademark Office, the U.S. Copyright Office and any other applicable Governmental Authorities necessary to perfect the security interest hereunder in such After-Acquired Intellectual Property.

(i) Delivery and Control of Slot Transfer Documents.  In order to facilitate a subsequent transfer, if any, of Slots held by the Loan Parties, the applicable Loan Party (A) has, prior to the Initial Closing Date, executed a blank, undated transfer document for each Pledged Slot (as defined in the Slot Security Agreement) held by such Loan Party as of the Initial Closing Date, and (B) shall, on the date of acquisition thereof, execute a blank, undated transfer document for each Pledged Slot acquired by such Loan Party after the Initial Closing Date, in each case, be held in escrow by the Collateral Agent until (i) exercise by the Administrative Agent or the Collateral Agent and the Lenders of their rights upon the occurrence and during the continuance of a Collateral Enforcement Event of Default as set forth in and subject to Section 8.02 and Section 10.07 of this Agreement and Section 9 of the Slot Security Agreement or (ii) termination of, or release from, the Liens of the Slot Security Agreement and this Agreement in accordance with the terms thereof and hereof.

 

10.05 Performance by Collateral Agent of the Loan Parties’ Obligations.

 

(a) Collateral Agent Appointed Attorney-in-Fact.  Each Loan Party hereby irrevocably appoints the Collateral Agent such Loan Party’s attorney-in-fact, with full authority in the place and stead of such Loan Party and in the name of such Loan Party or otherwise, from time to time, in the Collateral Agent’s discretion after the occurrence and during the continuance of a Collateral Enforcement Event of Default, to take any action and to execute any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation:

 

(i) to obtain and adjust insurance required to be paid to the Collateral Agent pursuant to this Agreement,

 

(ii) to ask for, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Pledged Collateral,

 

(iii) to receive, indorse and collect any drafts or other instruments, documents and chattel paper, in connection with clause (i) or (ii) above, and

 

(iv) to file any claims or take any action or institute any proceedings that the Collateral Agent may deem necessary or desirable for the collection of any of the Pledged Collateral or otherwise to enforce the rights of the Collateral Agent with respect to any of the Pledged Collateral; provided that the Collateral Agent shall not exercise any such rights under this Section 10.05(a) except upon occurrence and during the continuance of a Collateral Enforcement Event of Default.

 

(b) Collateral Agent May Perform.  If any Loan Party fails to perform any agreement contained herein, the Collateral Agent may, as the Collateral Agent deems necessary to protect the security interest granted hereunder in the Pledged Collateral or to protect the value thereof, but without any obligation to do so after the occurrence and during the continuance of a Collateral Enforcement Event of Default, itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by such Loan Party under Section 12.04.

 

(c) Collateral Agent Not Liable.  The Collateral Agent shall in no way be responsible for the payment of any costs incurred in connection with preserving or disposing of Pledged Collateral.

 

10.06 The Collateral Agent’s Duties.

 

(a)  The powers conferred on the Collateral Agent hereunder are solely to protect the Secured Parties’ interest in the Pledged Collateral and shall not impose any duty upon it to exercise any such powers.   Other than the exercise of reasonable care to assure the safe custody of the Pledged Collateral while being held by the Collateral Agent pursuant to the terms of the Secured Credit Documents, the Collateral Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the grantor of such Pledged Collateral shall be responsible for preservation of all rights in the Pledged Collateral, and the Collateral Agent shall be relieved of all responsibility for the Pledged Collateral upon surrendering it or tendering the surrender of it to such grantor.  The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Collateral Agent shall not have responsibility for taking any necessary steps to preserve rights against any parties with respect to any of the Pledged Collateral.  In the event of a public or private sale of Pledged Collateral pursuant to the terms of the Secured Credit Documents, the Collateral Agent shall have no obligation to clean-up, repair or otherwise prepare the Pledged Collateral for sale.

 

(b) Anything contained herein to the contrary notwithstanding, the Collateral Agent may from time to time, when the Collateral Agent deems it to be necessary, appoint one or more subagents (each a “Subagent”) for the Collateral Agent hereunder with respect to all or any part of the Pledged Collateral.  In the event that the Collateral Agent so appoints any Subagent with respect to any Pledged Collateral, (i) the assignment and pledge of such Pledged Collateral and the security interest granted in such Pledged Collateral by each Loan Party hereunder shall be deemed for purposes of this Agreement to have been made to such Subagent, in addition to the Collateral Agent, for the ratable benefit of the Secured Parties, as security for the Secured Credit Obligations of such Loan Party, (ii) such Subagent shall automatically be vested, in addition to the Collateral Agent, with all rights, powers, privileges, interests and remedies of the Collateral Agent hereunder with respect to such Pledged Collateral, and (iii) the term “Collateral Agent”, when used herein in relation to any rights, powers, privileges, interests and remedies of the Collateral Agent with respect to such Pledged Collateral, shall include such Subagent; provided, however, that no such Subagent shall be authorized to take any action with respect to any such Pledged Collateral unless and except to the extent expressly authorized in writing by the Collateral Agent.

 

(c) Notwithstanding anything herein or in the other Secured Credit Documents to the contrary, the Collateral Agent shall be fully justified in failing or refusing to take any action under any Secured Credit Document unless it shall first receive direction from the Required Secured Parties and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.

 

10.07 Remedies.  If any Event of Default shall have occurred and be continuing:

(a) The Collateral Agent may, at the direction of the Required Secured Parties, exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party upon default under the Uniform Commercial Code (whether or not the Uniform Commercial Code applies to the affected Pledged Collateral) and also may:  (i) require each Loan Party to, and each Loan Party hereby agrees that it will at its expense and upon request of the Collateral Agent or any Significant Lender forthwith, assemble all or part of the Pledged Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place and time to be designated by the Collateral Agent that is reasonably convenient to such Loan Party and the Collateral Agent; (ii) without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as are commercially reasonable; (iii) occupy any premises owned or leased by any of the Loan Parties where the Pledged Collateral or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and remedies hereunder or under law, without obligation to such Loan Party in respect of such occupation; and (iv) exercise any and all rights and remedies of any of the Loan Parties under or in connection with the Pledged Collateral, or otherwise in respect of the Pledged Collateral, including, without limitation, (A) any and all rights of such Loan Party to demand or otherwise require payment of any amount under, or performance of any provision of, the Receivables, the Related Contracts and the other Pledged Collateral, (B) withdraw, or cause or direct the withdrawal, of all funds with respect to the Account Collateral and (C) exercise all other rights and remedies with respect to the Receivables, the Related Contracts and the other Pledged Collateral, including, without limitation, those set forth in Section 9-607 of the Uniform Commercial Code.  To the extent not inconsistent with the Federal Aviation Act, the DOT requirements and the FAA requirements, the Collateral Agent or any other Secured Party may be the purchasers of any or all of the Pledged Collateral at any such sale and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at such sale, to use and apply any of the Obligations owed to such Person as a credit on account of the purchase price of any Collateral payable by such Person at such sale.  Each purchaser at any such sale shall acquire the property sold absolutely free from any claim or right on the part of the Grantors, and each Grantor hereby waives, to the fullest extent permitted by law, all rights of redemption, stay or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.  Each Loan Party agrees that, to the extent notice of sale shall be required by law, at least 10 days’ notice to such Loan Party of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification.  The Collateral Agent shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given.  The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.  Any Account Collateral and any Proceeds of any Security Collateral may be applied by the Collateral Agent towards payment of the Secured Credit Obligations.

(b) Any cash held by or on behalf of the Collateral Agent and all cash proceeds received by or on behalf of the Collateral Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral shall be applied against the Secured Credit Obligations, in the manner set forth in Section 8.03.  Any surplus of such cash or cash proceeds held by the Collateral Agent and remaining after payment in full of the Secured Credit Obligations shall be paid over to the applicable Loan Party or to whomever may be lawfully entitle to receive such surplus.

 

(c) All payments received by any Loan Party under or in connection with the Pledged Collateral shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds of such Loan Party and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary indorsement).

 

(d) The Collateral Agent may, without notice to any Loan Party except as required by law or Section 8.02 and at any time or from time to time, charge, set off and otherwise apply all or any part of the Secured Credit Obligations against any funds held with respect to the Account Collateral or in any other deposit account.

 

(e) In the event of any sale or other disposition of any of the Intellectual Property Collateral of any Loan Party, the goodwill symbolized by any Trademarks subject to such sale or other disposition shall be included therein, and such Loan Party shall supply to the Collateral Agent or its designee such Loan Party’s know-how and expertise, and documents and things relating to any Intellectual Property Collateral subject to such sale or other disposition, and such Loan Party’s customer lists and other records and documents relating to such Intellectual Property Collateral and to the manufacture, distribution, advertising and sale of products and services of such Loan Party.

 

(f) The Collateral Agent is authorized, in connection with any sale of the Security Collateral pursuant to this Section 10.07, to deliver or otherwise disclose to any prospective purchaser of the Security Collateral any information in its possession relating to such Security Collateral.

11.01 Guaranty.  Each Guarantor, severally, unconditionally and irrevocably guarantees (the undertaking by each Guarantor under this Article XI being the “Guaranty”) the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all of the Obligations of each of the other Loan Parties now or hereafter existing under or in respect of the Loan Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premium, fees, indemnification payments, contract causes of action, costs, expenses or otherwise (such Obligations being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by the Administrative Agent or any of the other Secured Parties in enforcing any rights under this Guaranty or any other Loan Document.  Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors.

 

11.02 Guaranty Absolute.  Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent or any other Secured Party with respect thereto.  The Obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations or any other Obligations of any Loan Party under the Loan Documents, and a separate action or actions may be brought and prosecuted against such Guarantor to enforce this Guaranty, irrespective of whether any action is brought against any other Loan Party or whether any other Loan Party is joined in any such action or actions.  The liability of each Guarantor under this Guaranty shall be absolute, unconditional and irrevocable irrespective of, and such Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any and all of the following:

 

(a) any lack of validity or enforceability of any Loan Document or any other agreement or instrument relating thereto;

 

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any Loan Party under the Loan Documents, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise;

 

(c) any taking, exchange, release or nonperfection of any Collateral, or any taking, release or amendment or waiver of or consent to departure from this Guaranty or any other guaranty, for all or any of the Guaranteed Obligations;

 

(d) any manner of application of Collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral for all or any of the Guaranteed Obligations or any other Obligations of any Loan Party under the Loan Documents, or any other property and assets of any other Loan Party or any of its Subsidiaries;

 

(e) any change, restructuring or termination of the corporate structure or existence of any other Loan Party or any of its Subsidiaries;

 

(f) any failure of the Administrative Agent or any other Secured Party to disclose to any Loan Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party now or hereafter known to the Administrative Agent or such other Secured Party, as the case may be (such Guarantor waiving any duty on the part of the Secured Parties to disclose such information);

 

(g) the failure of any other Person to execute this Agreement or any other guarantee or agreement of the release or reduction of the liability of any of the other Loan Parties or any other guarantor or surety with respect to the Guaranteed Obligations; or

 

(h) any other circumstance (including, without limitation, any statute of limitations or any existence of or reliance on any representation by the Administrative Agent or any other Secured Party) that might otherwise constitute a defense available to, or a discharge of, such Guarantor, any other Loan Party or any other guarantor or surety.

 

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Administrative Agent or any other Secured Party or by any other Person upon the insolvency, bankruptcy or reorganization of any other Loan Party or otherwise, all as though such payment had not been made.

 

11.03 Waivers and Acknowledgments.

(a) Each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and this Guaranty, and any requirement that the Administrative Agent or any other Secured Party protect, secure, perfect or insure any Lien or any property or assets subject thereto or exhaust any right or take any action against any other Loan Party or any other Person or any Collateral.

 

(b) Each Guarantor hereby unconditionally waives any right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.  Each Guarantor acknowledges and agrees that this Guaranty is a guarantee of payment and not of collection.

 

(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by the Secured Parties which in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights to proceed against any of the other Loan Parties, any other guarantor or any other Person or any Collateral, and (ii) any defense based on any right of setoff or counterclaim against or in respect of the Obligations of such Guarantor hereunder.

 

(d) Each Guarantor acknowledges that the Administrative Agent may, without notice to or demand upon such Guarantor and without affecting the liability of such Guarantor under this Guaranty, foreclose under any Collateral Document by nonjudicial sale, and such Guarantor hereby waives any defense to the recovery by the Administrative Agent and the other Secured Parties against such Guarantor of any deficiency after such nonjudicial sale and any defense or benefits that may be afforded by applicable law.

 

(e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of any Secured Party to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party or any of its Subsidiaries now or hereafter known by such Secured Party.

 

(f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in Section 11.02 and this Section 11.03 are knowingly made in contemplation of such benefits.

11.04 Subrogation.  Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or may hereafter acquire against any other Loan Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of its Obligations under this Guaranty or under any other Loan Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Administrative Agent or any other Secured Party against such other Loan Party or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from such other Loan Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, until such time as all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash and the Term Commitments shall have expired or terminated.  If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the latest of (a) the payment in full in cash of all of the Guaranteed Obligations and all other amounts payable under this Guaranty and (b) the Maturity Date, such amount shall be received and held in trust for the benefit of the Administrative Agent and the other Secured Parties (in the same form as so received) and shall forthwith be paid to the Administrative Agent (without any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising.  If (i) any Guarantor shall pay to the Administrative Agent all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash and (iii) the Maturity Date shall have occurred, the Administrative Agent and the other Secured Parties will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from the payment made by such Guarantor pursuant to this Guaranty.

 

11.05 Continuing Guarantee; Assignments.  This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of all of the Guaranteed Obligations and all other amounts payable under this Guaranty and (ii) the Maturity Date, (b) be binding upon each Guarantor and its successors and assigns and (c) inure to the benefit of, and be enforceable by, the Administrative Agent and the other Secured Parties and their respective successors, transferees and assigns.  Without limiting the generality of clause (c) of the immediately preceding sentence, any Lender may assign or otherwise transfer all or any portion of its rights and obligations under this Agreement (including, without limitation, all or any portion of its Term Commitment, the Term Loans owing to it and the Term Notes held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender Party under this Article XI or otherwise, in each case as provided in Section 12.07.  Notwithstanding clause (b) of this Section 11.05, no Guarantor may assign any of its obligations under this Guaranty.

 

11.06 No Reliance.  Each Guarantor has, independently and without reliance upon the Collateral Agent, Administrative Agent or any Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Guaranty and each other Loan Document to which it is or is to be a party, and such Guarantor has established adequate means of obtaining from each other Loan Party on a continuing basis information pertaining to, and is now and on a continuing basis will be completely familiar with, the business, condition (financial or otherwise), operations, performance, properties and prospects of such other Loan Party.

12.01 Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

(a) waive any condition set forth in Section 4.01(a), without the written consent of each Lender;

 

(b) (i) extend or increase the Term Commitment of any Lender (or reinstate any Term Commitment terminated pursuant to Section 8.02) without the written consent of all Lenders;

 

(c) postpone any date scheduled for any payment of principal or interest under this Agreement without the written consent of each Lender directly affected thereby;

 

(d) reduce the principal of, or the rate of interest specified herein on any Term Loan or any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary to amend Section 2.04(b);

 

(e) change any provision of this Section 12.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

 

(f) release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender; and

 

(g) release all or substantially all of the value of the Guaranty, without the written consent of each Lender;

 

and provided further that (i) no amendment, waiver or consent shall, unless in writing and signed by the Collateral Agent in addition to the Lenders required above, affect the rights or duties of, or any fees or other amounts payable to, the Collateral Agent under this Agreement or any other Loan Document; and (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of, or any fees or other amounts payable to, the Administrative Agent under this Agreement or any other Loan Document.

 

Anything to the contrary in this Agreement notwithstanding (except as provided in this Section 12.01), the Collateral Agent, the Administrative Agent, the Lenders and the Loan Parties agree that no amendment, modification or other change to this Agreement that increases the amount of Indebtedness that is permitted to be secured by the Collateral or modifies Section 8.02 or Section 8.03 or this provision of Section 12.01 shall be made without the written consent of the Required Northwest Parties. For the avoidance of doubt, the Northwest Parties are an express third-party beneficiary of this Agreement.

 

(a) General.  Unless otherwise expressly provided in this Agreement, all notices and other communications provided for hereunder or any other Loan Document shall be in writing (including by facsimile transmission).  All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number or electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i) if to the Borrower, the Administrative Agent or the Collateral Agent, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 12.02 or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and

 

(ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number provided by such Lender to the Administrative Agent and the Borrower at the time such Person becomes a lender or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the Borrower, the Administrative Agent and the Collateral Agent.

 

All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, first-class postage prepaid; (C) if delivered by facsimile, when sent; and (D) if delivered by electronic mail, when received; provided, however, that notices and other communications to the Administrative Agent or the Collateral Agent pursuant to Article II shall not be effective until actually received by such Person.  In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder.

 

(b) Effectiveness of Facsimile Documents and Signatures.  Loan Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Loan Parties, the Administrative Agent, the Collateral Agent and the Lenders.  The Administrative Agent and the Collateral Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.

 

(c) Reliance by Administrative Agent, Collateral Agent and Lenders.  The Administrative Agent, the Collateral Agent and the Lenders shall be entitled to rely and act upon any notices purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower.

12.03 No Waiver; Cumulative Remedies.  No failure by any Lender, the Collateral Agent or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

12.04 Attorney Costs, Expenses and Taxes.  The Borrower agrees (a) to pay or reimburse the Administrative Agent and the Collateral Agent and each Lender for all out-of-pocket costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Loan Documents (and, in the case of Republic, in connection with previous alternative lending structures and any related intercreditor arrangements), and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs (including, without limitation, specialty and local counsel) and (b) to pay or reimburse the Administrative Agent, the Collateral Agent and each Lender for all costs and expenses incurred in connection with the enforcement of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs.  The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent and each Lender and the cost of independent public accountants and other outside experts retained by the Administrative Agent, the Collateral Agent or any Lender.  All amounts due under this Section 12.04 shall be payable within two Business Days after demand therefor.  The agreements in this Section shall survive the termination of the Term Commitments and repayment of all other Obligations.  If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it hereunder or under any Loan Document, including, without limitation, Attorney Costs and indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent, the Collateral Agent or any Lender, in its sole discretion and any such amounts so paid by the Administrative Agent, the Collateral Agent or any Lender, shall constitute Obligations owing to such person.

12.05 Indemnification by the Borrower.  Whether or not the transactions contemplated hereby are consummated, the Borrower shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the “Indemnitees”) from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Term Commitment or Term Loan or the use or proposed use of the proceeds therefrom, (c) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by the Borrower, any Subsidiary or any other Loan Party, or any Environmental Liability related in any way to any Loan Party, or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”), in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.  No Indemnitee shall have any liability for any indirect, special or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Initial Closing Date).  In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 12.05 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors or an Indemnitee or any other Person, whether or not any Indemnitee is otherwise a party thereto and whether or not any of the transactions contemplated hereunder or under any of the other Loan Documents is consummated. All amounts due under this Section 12.05 shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall survive the resignation of the Administrative Agent, the Collateral Agent, the replacement of any Lender, the termination of the Term Commitments, and the repayment, satisfaction or discharge of all the other Obligations.

 

12.06 Payments Set Aside.  To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent, the Collateral Agent or any Lender, or the Administrative Agent, the Collateral Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the Collateral Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to promptly pay to the Administrative Agent and the Collateral Agent upon demand its Pro Rata Share of any amount so recovered from or repaid by the Administrative Agent and the Collateral Agent.

 

12.07 Successors and Assigns.

 

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) in accordance with the provisions of subsection (b) of this Section or (ii) by way of participation in accordance with the provisions of subsection (d) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.  In addition, no Guarantor may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender.

 

(b) Any Lender may, with the prior written consent of each Significant Lender, at any time assign to any assignee (an “Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Term Commitment and the Term Loans at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Term Commitment and the Term Loans at the time owing to it, the aggregate amount of the Term Commitment or, if the applicable Term Commitment is not then in effect, the principal outstanding balance of the Term Loan of the assigning Lender subject to each such assignment shall not be less than $5,000,000 or an integral multiple of $50,000 in excess thereof; (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Term Loans or the Term Commitment assigned.  Subject to acknowledgement and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 12.04 and 12.05 with respect to facts and circumstances occurring prior to the effective date of such assignment).  Upon request, the Borrower (at its expense) shall execute and deliver a Term Note to the Assignee.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

(c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Term Commitments of, and principal amounts of the Term Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d) Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Term Commitment and/or the Term Loans; provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Collateral Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 12.01 that directly affects such Participant.  Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.08 as though it were a Lender.

 

(e) A Participant shall not be entitled to receive any greater payment under Section 3.01 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  

 

12.08 Setoff.  In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of any Event of Default, each Lender and each of its Affiliates is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness or other obligations at any time owing by, such Lender to or for the credit or the account of the respective Loan Parties against any and all Obligations owing to such Lender hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not the Administrative Agent, the Collateral Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or indebtedness.  Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application.  The rights of the Administrative Agent, the Collateral Agent and each Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of setoff) that the Administrative Agent, the Collateral Agent, such Lender and their respective Affiliates may have.

 

12.09 Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent, the Collateral Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Term Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent, the Collateral Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 

12.10 Counterparts.  This Agreement and each other Loan Document may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery by telecopier or electronic image transmission (e.g., PDF) of an executed counterpart of a signature page to this Agreement and each other Loan Document shall be effective as delivery of an original executed counterpart of this Agreement and such other Loan Document.  The Administrative Agent may also require that any such documents and signatures delivered by telecopier or electronic image transmission be confirmed by a manually-signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature delivered by telecopier or electronic image transmission.

 

12.11 Integration.  This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter.  In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent, the Collateral Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement.  Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

12.12 Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent, the Collateral Agent and each Lender, regardless of any investigation made by the Administrative Agent, the Collateral Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent, the Collateral Agent or any Lender may have had notice or knowledge of any Default or breach of such representation and warranty at the time the Term Loans were extended, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

 

12.13 TPG Entities as Lenders.  Each Lender acknowledges that the TPG Entities own a majority of the Equity Interests of the Parent and, consequently, may receive information regarding any Loan Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that the TPG Entities shall be under no obligation to provide such information to them.  With respect to the Term Loans, the TPG Entities shall have the same rights and powers (and shall have the same rights to exercise such rights and powers) under this Agreement as any other Lender.

 

12.14 Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

12.15 Tax Forms.

(ii) Each Lender that is a Foreign Person, to the extent it does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender), shall deliver to each of the Borrower and the Administrative Agent on the date when such Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of the Administrative Agent (in the reasonable exercise of its discretion), (A) two duly signed completed copies of the forms or statements required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account that is not subject to U.S. withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together with any information such Lender chooses to transmit with such form, and any other certificate or statement of exemption required under applicable Law, to establish that such Lender is not acting for its own account with respect to a portion of any such sums payable to such Lender.

 

(iii) The Loan Parties shall not be required to pay any additional amount to any Person under Section 3.01 (A) with respect to any Taxes on the basis of the information, certificates or statements of exemption such Person transmits with an IRS Form W-8IMY pursuant to this Section 12.14(a) or (B) if such Person shall have failed to satisfy the provisions of this Section 12.14(a) and Section 12.14(b); provided that if such Person is a Lender and shall have satisfied the requirement of this Section 12.14(a) on the date it became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, nothing in this Section 12.14(a) shall relieve the Borrower of its obligation to pay any amounts pursuant to Section 3.01 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in governmental interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing that such Lender or other Person for the account of which such Lender receives any sums payable under any of the Loan Documents is not subject to withholding or is subject to withholding at a reduced rate.

(b) Each Lender, Administrative Agent and Collateral Agent that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to each of the Borrower and the Administrative Agent two duly signed completed copies of IRS Form W-9.  If such Person fails to deliver such forms, then each of the Borrower and the Administrative Agent may withhold from any payment to such Person an amount equivalent to the applicable back-up withholding tax imposed by Applicable Law.

 

(c) If any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent.  The obligation of the Lenders under this Section shall survive the termination of the Term Commitments, repayment of all Obligations hereunder and the resignation of the Administrative Agent.

 

12.16 Governing Law.

 

(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN ANY SUCH LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SUBSECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

 

(b) ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS HEREUNDER AND THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH LOAN PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND EACH LENDER, IRREVOCABLY

 

(i) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

 

(ii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

 

(iii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO BORROWER (IN THE CASE OF ANY LOAN PARTY), OR TO ANY PERSON THAT IS NOT A LOAN PARTY, TO SUCH PERSON AT THE APPLICABLE ADDRESS SET FORTH ON SCHEDULE 12.02;

 

(iv) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (iii) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER IT IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;

 

(v) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST IT IN THE COURTS OF ANY OTHER JURISDICTION; AND

 

(vi) AGREES THAT THE PROVISIONS OF THIS SECTION 12.15 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SUBSECTION 5-1402 OR OTHERWISE.

 

12.17 Waiver of Right to Trial by Jury.  EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, WHICH EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 12.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TERM LOANS MADE HEREUNDER.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

12.18 Binding Effect.  This Agreement shall become effective when it shall have been executed by the Loan Parties, the Lenders and the Collateral Agent and thereafter, the Administrative Agent, and shall be binding upon and inure to the benefit of the Loan Parties, the Administrative Agent, the Collateral Agent and each Lender and their respective successors and assigns, except that the Loan Parties shall not have the right to assign their respective rights or obligations hereunder or any interest herein without the prior written consent of each of the Lenders.

 

12.19 Reaffirmation of Guaranty and Grant of Security.

 

(a)           Each Guarantor hereby (a) acknowledges that it has reviewed the terms and provisions of this Agreement and consents to the amendments and modifications effected hereby and (b) agrees and confirms, both before and after giving effect to the amendment and restatement of the Existing Credit Agreement pursuant to this Agreement, that it is a party to and is bound by the Guaranty as a guarantor thereunder by virtue of its having been an original signatory thereto and that its guaranty provided for in the Guaranty is hereby reaffirmed, remains in full force and effect, after giving effect to this Agreement, and constitutes a continuing guaranty to the Lenders and their respective successors, indorsees, transferees and assigns, for the prompt and complete payment and performance by the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations with the same effect as if all terms of such guaranty were set forth herein.  The Guaranty is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

 

(b) Each Loan Party hereby (a) acknowledges that it has reviewed the terms and provisions of this Agreement and consents to the amendments and modifications effected hereby and (b) agrees and confirms, both before and after giving effect to the amendment and restatement of the Existing Credit Agreement pursuant to this Agreement, that it is a party to and is bound by Article X of this Agreement and each Collateral Document as a grantor of the Collateral thereunder by virtue of its having been an original signatory thereto.  Article X of this Agreement and the other Collateral Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  Without limiting the generality of the foregoing, Article X of this Agreement, each Collateral Document and all of the Collateral do and shall continue to secure the payment of all Secured Credit Obligations.  Each Loan Party, each as a grantor under each Collateral Document that such Loan Party is a party to, hereby (x) reaffirms its grant of, and hereby grants, a security interest in such Collateral to the Collateral Agent, for the ratable benefit of the Secured Parties, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of all the Secured Credit Obligations with the same effect as if all terms of such grant contained in each Collateral Document were set forth herein, (y) pursuant to any applicable law, authorizes the Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Loan Party in such form and in such offices as the Collateral Agent determines appropriate to perfect the security interests of the Collateral Agent and the other Secured Parties and authorizes the Collateral Agent to use the collateral description “all personal property, whether now owned or hereafter acquired” or any other similar collateral description in any such financing statements and (z) ratifies and authorizes the filing by the Collateral Agent of any financing statement with respect to the Collateral made prior to the date hereof.

12.20 Consent of Existing Lenders.  Each of the Existing Lenders hereby consents to the amendments and modifications effected hereby, and to the execution and delivery by the Agents on or prior to the Amendment and Restatement Effective Date, of this (i) Agreement and (ii) such other Loan Documents as the Administrative Agent deems necessary in connection with funding of the Term Loans on the Amendment and Restatement Effective Date.

 

12.21 No Novation.  Each of the Agents, the Existing Lenders, the Lenders, Parent, Borrower and each other Loan Party acknowledges and agrees that: (a) this Agreement supersedes the Existing Credit Agreement and has been executed and delivered in renewal, amendment, restatement and modification, but not in novation or extinguishment of, the obligations under the Existing Credit Agreement; (b) all obligations under the Existing Credit Agreement are continued and restated hereunder, as set forth herein and in the other Loan Documents; and (c) the Liens securing the Existing Credit Agreement have not been terminated and continue in effect, as security for all of the Obligations and the Secured Credit Obligations.