EXHIBIT 10.1
FIRST AMENDMENT, dated as of March
9, 2007 (this “ Amendment ”), to the Super
Priority Debtor In Possession and Exit Credit and Guarantee
Agreement, dated as of August 21, 2006, (as further amended,
supplemented or otherwise modified from time to time, the “
Credit Agreement ”), among NORTHWEST AIRLINES
CORPORATION, a Delaware corporation, a debtor and debtor in
possession under Chapter 11 of the Bankruptcy Code (as defined
below) or such entity that becomes a guarantor and a loan party
hereunder pursuant to Section 5.5 of the Credit Agreement, as
applicable (“ Holdings ”), NORTHWEST AIRLINES
HOLDINGS CORPORATION, a Delaware corporation, a debtor and debtor
in possession under Chapter 11 of the Bankruptcy Code or such
entity that becomes a guarantor and a loan party hereunder pursuant
to Section 5.5 of the Credit Agreement, as applicable (“
NWAC ”), NWA INC., a Delaware corporation, a debtor
and debtor in possession under Chapter 11 of the Bankruptcy Code or
such entity that becomes a guarantor and a loan party hereunder
pursuant to Section 5.5 of the Credit Agreement, as applicable
(“ NWA ”), NORTHWEST AIRLINES, INC., a Minnesota
corporation, a debtor and debtor in possession under Chapter 11 of
the Bankruptcy Code or such entity that becomes the borrower and
loan party hereunder pursuant to Section 5.5 of the Credit
Agreement, as applicable (the “ Borrower ”); the
several banks and other financial institutions or entities from
time to time parties to the Credit Agreement (the “
Lenders ”); the Syndication Agent, the Documentation
Agent, the Co-Syndication Agent, the Co-Documentation Agent, the
Agent, the Co-Arrangers, the Joint Lead Arrangers and the
Collateral Agent named therein; and CITICORP USA, INC., as
Administrative Agent for both the DIP Facilities and the Exit
Facilities (in such capacity, the “ Administrative
Agent ”).
R E C I T A
L S :
A.
The Borrower has requested that the Lenders agree to amend certain
provisions of the Credit Agreement as herein set forth.
B.
The Lenders hereby consent to such amendments on the terms and
conditions contained herein.
NOW THEREFORE, the parties hereto
hereby agree as follows:
1.
Defined Terms . Unless otherwise defined herein,
capitalized terms which are defined in the Credit Agreement are
used herein as therein defined.
2.
Amendments .
(a)
Subject to the satisfaction of the conditions precedent set forth
in Section 3(a) of this Amendment, the following amendments to the
Credit Agreement shall become effective:
(i)
The definition of the term “Hedging Obligations” shall
be amended and restated to read in its entirety as
follows:
“ Hedging Obligations
”: as to any Person, all obligations and liabilities of
such Person under any Interest Rate Protection Agreement, Fuel
Hedging Agreement or Currency Exchange Rate Protection Agreement,
which are payable upon the termination of such agreement.
Hedging Obligations under Specified Hedging Agreements shall be
valued on a mark-to-market basis from time to time
pursuant to a methodology agreed to
among the Borrower, the applicable counterparty, and the
Administrative Agent, which shall also include an agreement among
the Borrower, the applicable counterparty, and the Administrative
Agent as to the maximum amount of Hedging Obligations under such
Specified Hedging Agreements that can be included as
“Obligations” under and as defined in this
Agreement.
(ii)
The definition of the term “Specified Currency Exchange Rate
Protection Agreement” shall be amended and restated to read
in its entirety as follows:
“ Specified Currency
Exchange Rate Protection Agreement ”: any Currency
Exchange Rate Protection Agreement entered into by the Borrower and
any Person that, at the time such Person entered into such Currency
Exchange Rate Protection Agreement, was a Lender or Lender
Affiliate designated by the relevant Lender and the Borrower, by
written notice to the Administrative Agent, as a Specified Currency
Exchange Rate Protection Agreement, which notice shall include a
copy of an agreement providing for (i) a methodology agreed to
by the Borrower, such Lender or Lender Affiliate and the
Administrative Agent of valuing on a mark-to-market basis the
amount of Hedging Obligations under such Specified Currency
Exchange Rate Protection Agreement from time to time and
(ii) an agreed upon maximum amount of Hedging Obligations
under such Specified Currency Exchange Rate Protection Agreement
that can be included as “Obligations” under and as
defined in this Agreement.
(iii)
The definition of the term “Specified Hedging
Agreement” shall be amended and restated to read in its
entirety as follows:
“ Specified Hedging
Agreement ”; any Specified Currency Exchange Rate
Protection Agreement, any Specified Interest Rate Protection
Agreement or any Specified Fuel Hedging Agreement.
(iv)
The definition of the term “Specified Interest Rate
Protection Agreement” shall be amended and restated to read
in its entirety as follows:
“ Specified Interest Rate
Protection Agreement ”: any Interest Rate
Protection Agreement entered into by the Borrower and any Person
that, at the time such Person entered into such Interest Rate
Protection Agreement, was a Lender or Lender Affiliate designated
by the relevant Lender and the Borrower, by written notice to the
Administrative Agent, as a Specified Interest Rate Protection
Agreement, which notice shall include a copy of an agreement
providing for (i) a methodology agreed to by the Borrower,
such Lender or Lender Affiliate and the Administrative Agent of
valuing on a mark-to-market basis the amount of Hedging Obligations
under such Specified Interest Rate Protection Agreement from time
to time and (ii) an agreed upon maximum amount of Hedging
Obligations under such Specified Interest Rate Protection Agreement
that can be included as “Obligations” under and as
defined in this Agreement.
(v)
Section 1.1 of the Credit Agreement shall be amended by adding the
following new definitions in the appropriate alphabetical
order:
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“ First Amendment Date
”: March 9, 2007.
“ Fuel Hedging
Agreement ”: any swap, collars, forward, future or
derivative transactions or options or similar agreements or
arrangements involving, or settled by reference to, fuel
commodities.
“ Specified Fuel Hedging
Agreement ”: any Fuel Hedging Agreement entered
into by the Borrower and any Person that, at the time such Person
entered into such Fuel Hedging Agreement, was a Lender or Lender
Affiliate designated by the relevant Lender and the Borrower, by
written notice to the Administrative Agent, as a Specified Fuel
Hedging Agreement, which notice shall include a copy of an
agreement providing for (i) a methodology agreed to by the
Borrower, such Lender or Lender Affiliate and the Administrative
Agent of valuing on a mark-to-market basis the amount of Hedging
Obligations under such Specified Fuel Hedging Agreement from time
to time and (ii) an agreed upon maximum amount of Hedging
Obligations under such Specified Fuel Hedging Agreement that can be
included as “Obligations” under and as defined in this
Agreement.
(vi)
The first sentence of Section 2.8(a) of the Credit Agreement shall
be amended and restated to read in its entirety as
follows:
The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the
Applicable Rate then in effect with respect to Eurodollar Loans,
shared ratably among the Revolving Lenders and payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date (it
being understood that with respect to all Letters of Credit amounts
outstanding prior to the First Amendment Date, such fee shall be at
a per annum rate equal to the Applicable Rate as in effect with
respect to Eurodollar Loans prior to the First Amendment Date and
with respect to all Letter of Credit amounts outstanding on or
after the First Amendment Date, such fee shall be at a per annum
rate equal to the Applicable Rate as in effect with respect to
Eurodollar Loans on or after the First Amendment Date).
(vii)
Section 6.2(h) of the Credit Agreement shall be amended by
replacing the phrase “the Chief Financial Officer”
appearing therein with the phrase “a Responsible
Officer”.
(b)
Subject to the satisfaction of the conditions precedent set forth
in Section 3(a) and Section 3(b) of this Amendment, the definition
of the term “Applicable Rate” shall be amended and
restated to read in its entirety as follows:
“ Applicable Rate
”:
(a) with respect to Loans
outstanding prior to the First Amendment Date, (i) 1.50%, in
the case of ABR Loans, and (ii) 2.50%, in the case of Eurodollar
Loans, and
(b) with respect to Loans
outstanding on or after the First Amendment Date, (i) 1.00%,
in the case of ABR Loans, and (ii) 2.00%, in the case of Eurodollar
Loans.
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(c)
Subject to the satisfaction of the conditions precedent set forth
in Section 3(a) and Section 3(c) of this Amendment, the following
amendments to the Credit Agreement shall become
effective:
(i)
The proviso in the definition of the term
“Obligations” shall be amended and restated to read in
its entirety as follows:
provided , however , that the aggregate amount of
all Hedging Obligations under all Specified Hedging Agreements at
any time outstanding that shall be included as
“Obligations” shall not exceed $150,000,000.
(ii)
Clause (ii) of the first paragraph of Section 2.4 of the Credit
Agreement shall be amended and restated to read in its entirety as
follows:
(ii) does not result in (A) the
sum of (1) the aggregate unpaid principal amount of the Term
Loans then outstanding plus (2) the aggregate amount of
Revolving Extensions of Credit of all Revolving Lenders then
outstanding exceeding (B) the Maximum Amount.
(iii)
Clause (z) of Section 2.6(a) of the Credit Agreement shall be
amended and restated to read in its entirety as follows:
(z) the sum of (1) the
aggregate unpaid principal amount of the Term Loans then
outstanding plus (2) the aggregate amount of Revolving
Extensions of Credit of all Revolving Lenders then outstanding
would exceed the Maximum Amount.
(iv)
The first sentence of Section 3.2(b) of the Credit Agreement shall
be amended and restated to read in its entirety as
follows:
In addition, if at any time the sum
of (i) the aggregate unpaid principal amount of the Term Loans
then outstanding plus (ii) the aggregate amount of Revolving
Extensions of Credit of all Revolving Lenders then outstanding
exceeds the Maximum Amount, the Borrower shall immediately prepay
the Loans in an amount equal to such excess.
(v)
The definition of the term “Total Appraised Value
Ratio” shall be amended and restated to read in its entirety
as follows:
“ Total Appraised Value
Ratio ”: at any time, the ratio of (a) Total
Appraised Value (determined as of the then most recent Appraisal of
the Pool Assets) to (b) the sum of (i) the aggregate unpaid
principal amount of all Term Loans then outstanding, plus
(ii) the aggregate Revolving Commitments of all Revolving
Lenders then in effect or, if the Revolving Commitments have been
terminated, the amount of aggregate Revolving Extensions of Credit
of all Revolving Lenders then outstanding, plus (iii) the
amount of all Hedging Obligations under all Specified Hedging
Agreements then outstanding not to exceed $150,000,000, and plus
(iv) any Pari Passu Obligations (for purposes of this
definition, Pari Passu Obligations shall include any Pari Passu
Commitments).
3.
Effectiveness .
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(a)
The effectiveness of this Amendment (excluding Sections 2(b) and
2(c) hereof) is subject to the satisfaction on the First Amendment
Date of the following conditions precedent:
(i)
the Administrative Agent shall have received this Amendment,
executed and delivered by the Administrative Agent, Holdings, the
Borrower and the Required Lenders;
(ii)
the Bankruptcy Court shall have entered an order (in substantially
the form of Exhibit A hereto and otherwise in form and substance
reasonably satisfactory to the Administrative Agent), which shall
be certified by the Clerk of the Bankruptcy Court as having been
duly entered (the “ Authorizing Order ”), the
Authorizing Order shall be in full force and effect and shall not
have been vacated, reversed, modified, amended or stayed without
the written consent of the Required Lenders and, if the Authorizing
Order is the subject of a pending appeal in any respect, neither
the making of the Loans nor the performance by the Loan Parties of
their respective obligations under the Loan Documents shall be the
subject of a presently effective stay pending appeal.
(iii)
the Administrative Agent shall have received (1) all fees then due
and payable in connection with this Amendment; and (2) all expenses
payable by the Borrower as set forth in the Credit Agreement for
which invoices have been presented (including the reasonable fees
and expenses of legal counsel) on or before the First Amendment
Date;
(iv)
the Lenders shall have received an updated business plan as set
forth in the Borrower’s disclosure statement;
(v)
the Administrative Agent shall have received a certificate of each
Loan Party, dated the date hereof substantially in the form of
Exhibit B hereto, with appropriate insertions and attachments;
and
(vi)
The Administrative Agent shall have received the executed legal
opinions of counsel to the Borrower and the Guarantors, addressing
such matters as the Administrative Agent shall reasonably request,
including, without limitation, the enforceability of all Loan
Documents.
(b)
In addition to the satisfaction of the conditions precedent set
forth in Section 3(a) hereof and to the extent not received by the
Administrative Agent on or prior to the First Amendment Date, the
effectiveness of Section 2(b) of this Amendment is subject to the
Administrative Agent’s receipt after the First Amendment Date
of this Amendment executed by each Lender.
(c)
In addition to the satisfaction of the conditions precedent set
forth in Section 3(a) hereof and to the extent not received by the
Administrative Agent on or prior to the First Amendment Date, the
effectiveness of Section 2(c) of this Amendment is subject to the
Administrative Agent’s receipt after the First Amendment Date
of a duly executed amendment to the Intercreditor Agreement in form
and substance satisfactory to the Administrative Agent, together
with the appropriate consent of U.S. Bank National
Association.
4.
Representation and Warranties . Each of the Guarantors
and the Borrower hereby represents and warrants that, after giving
effect to the provisions of this Amendment, (a) each of the
representations and warranties made by any Loan Party in or
pursuant to the Loan Documents is true and correct in all material
respects on and as of the date hereof as if made on and as of such
date, except to the extent that such representation and warranty
refers to an earlier date, in which case it is true and correct
in
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all material respects as of such
earlier date, and (b) no Default or Event of Default has occurred
and is continuing.
5.
Continuing Effect of the Credit Agreement . This
Amendment shall not constitute an amendment of any other provision
of the Credit Agreement not expressly referred to herein and shall
not be construed as a waiver or consent to any Default, Event of
Default or future action on the part of any Loan Party that would
require the consent of the Lenders or the Administrative
Agent. Except as expressly amended hereby, the provisions of
the Credit Agreement are and shall remain in full force and
effect. Upon the effectiveness of this Amendment, each
reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”
or words of similar import shall mean and be a reference to the
Credit Agreement as amended hereby.
6.
Counterparts . This Amendment may be executed by the
parties hereto in any number of separate counterparts (including
facsimiled counterparts), each of which shall be deemed to be an
original, and all of which taken together shall be deemed to
constitute one and the same instrument.
7.
Expenses . The Borrower agrees to pay or reimburse the
Administrative Agent for all of its reasonable out-of-pocket costs
and expenses incurred in connection with the preparation,
negotiation and execution of this Amendment, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
8.
Reaffirmation . Each of the Guarantors hereby
acknowledges and reaffirms all of its obligations and undertakings
under each of the Loan Documents to which it is a party and
acknowledges and agrees that subsequent to, and after taking
account of the provisions of this Amendment, each such Loan
Document is and shall remain in full force and effect in accordance
with the terms thereof.
9.
GOVERNING LAW . THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
[The remainder of this page is
intentionally left blank.]
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IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be duly executed and delivered
by their proper and duly authorized officers as of the day and year
first above written.
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NORTHWEST AIRLINES CORPORATION
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By:
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/s/ DANIEL B. MATTHEWS
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Name: Daniel B. Matthews
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Title: Sr. Vice President &
Treasurer
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NORTHWEST AIRLINES HOLDINGS
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CORPORATION
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By:
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/s/ DANIEL B. MATTHEWS
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Name: Daniel B. Matthews
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Title: Sr. Vice President &
Treasurer
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NWA INC.
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By:
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/s/ DANIEL B. MATTHEWS
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Name: Daniel B. Matthews
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Title: Sr. Vice President &
Treasurer
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NORTHWEST AIRLINES, INC.
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By:
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/s/ DANIEL B. MATTHEWS
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Name: Daniel B. Matthews
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Title: Sr. Vice President &
Treasurer
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CITICORP USA, INC., as
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Administrative Agent, Lender and Issuing
Lender
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By:
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/s/ JAMES MCCARTHY
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Name: James McCarthy
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Title: Managing Director/Vice
President
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SIGNATURE PAGE TO
THE FIRST AMENDMENT TO
THE SUPER PRIORITY DEBTOR IN POSSESSION AND
EXIT CREDIT AND GUARANTY AGREEMENT
Signature page to the First
Amendment, dated as of March 9,
2007, to the Northwest
Airlines, Inc. Credit Agreement
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[Name of Lender]
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By:
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Name:
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Title:
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SIGNATURE PAGE TO
THE FIRST AMENDMENT TO
THE SUPER PRIORITY DEBTOR IN POSSESSION AND
EXIT CREDIT AND GUARANTY AGREEMENT
Exhibit A to the First
Amendment, dated as of March 9,
2007, to the Northwest
Airlines, Inc. Credit Agreement
(attached)
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re:
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Chapter 11
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)
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NORTHWEST AIRLINES CORPORATION., et
al.,
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Case No. 05-17930 (ALG)
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Debtors.
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Jointly Administered
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FIRST AMENDED FINAL ORDER
AUTHORIZING DEBTORS TO OBTAIN
SECURED POST-PETITION FINANCING ON A SUPER-
PRIORITY BASIS PURSUANT TO 11 U.S.C. §§ 105, 362, 363,
364, and 507(b)
Upon the motion (the
“Motion”) dated February 23, 2007 of the
above-captioned debtors and debtors-in-possession (the
“Debtors”),(1) including Northwest Airlines, Inc. (the
“Borrower”), and Northwest Airlines Corporation,
Northwest Airlines Holdings Corporation and NWA Inc. (the
“Guarantors” and, together with the Borrower, the
“Loan Parties”), seeking this Court’s
authorization pursuant to sections 364(c), 364(d)(1), and 507(b) of
the Bankruptcy Code, 11 U. S. C. §§ 101-1330 (the
“Bankruptcy Code”), and Rules 2002, 4001(c) and 9014 of
the Federal Rules of Bankruptcy Procedure (the “Bankruptcy
Rules”) (i) for the Loan Parties to enter into a First
Amendment to Super Priority Debtor in Possession and Exit Credit
and Guarantee Agreement substantially in the form of the draft
attached hereto as Appendix B (the “First
Amendment”), amending their existing Post-Petition Financing
(as defined below), to, among other things, reduce the interest
rate upon the satisfaction of the condition precedent set forth in
Section 3(b) of the First Amendment, accelerate the payment of
certain deferred fees, expand the
(1)
The Debtors are the following entities: Northwest Airlines
Corporation; NWA Fuel Services Corporation; Northwest Airlines
Holdings Corporation; NWA Inc.; Northwest Aerospace Training Corp.;
Northwest Airlines, Inc.; MLT Inc.; Compass Airlines, Inc. f/k/a
Northwest Airlines Cargo, Inc.; NWA Retail Sales Inc.; Montana
Enterprises, Inc.; NW Red Baron LLC; Aircraft Foreign Sales, Inc.;
NWA Worldclub, Inc.; and NWA Aircraft Finance.
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definition of “Hedging
Obligations” to include fuel hedges and, upon the
satisfaction of the condition precedent set forth in Section 3(c)
of the First Amendment, increase the dollar amount of
“Hedging Obligations” included in the
“Obligations”; (ii) for the Loan Parties to continue to
obtain post-petition financing (the “Post-Petition
Financing”) under a commitment of $1,225,000,000 (the
“Commitment”) (including up to $75,000,000 of Letters
of Credit (“Letters of Credit”)), pursuant to the Super
Priority Debtor in Possession and Exit Credit and Guarantee
Agreement (as amended by the First Amendment and as further amended
from time to time, the “Amended Credit Agreement”)(2)
among the Borrower, the Guarantors, Citicorp USA, Inc., as
Administrative Agent and Collateral Agent (the “A&C
Agent”), JPMorgan Chase Bank, N.A., as syndication agent for
the DIP Facilities and the Exit Facilities, Deutsche Bank Trust
Company Americas, as documentation agent for the DIP Facilities and
the Exit Facilities, Morgan Stanley Senior Funding, Inc., as
co-syndication agent for the DIP Facilities and the Exit
Facilities, U.S. Bank National Association, as agent for the DIP
Facilities and the Exit Facilities, Citigroup Global Markets Inc.
and J.P. Morgan Securities Inc., as joint lead arrangers and joint
book runners for the DIP Facilities, Citigroup Global Markets Inc.
and Deutsche Bank Securities Inc., as joint lead arrangers and
joint book runners for the Exit Facilities, Morgan Stanley Senior
Funding, Inc., as co-arranger, Calyon New York Branch, as
co-documentation agent and co-arranger, and the other financial
institutions from time to time parties to the Amended Credit
Agreement, including, without limitation, the fronting and issuing
banks for the Letters of Credit (collectively, the
“Lenders”), and for the Loan Parties to execute the
Amended Credit Agreement, revolving loan promissory notes and term
loan promissory notes to the extent set
(2)
Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Amended Credit
Agreement.
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forth in the Amended Credit
Agreement (the “Notes”), the Route Security Agreement
and other Security Documents and all ancillary documents in
connection with any of the foregoing (collectively, the “Loan
Documents”); (iv) for the Loan Parties to grant the Lenders,
pursuant to sections 364(c) and 364(d) of the Bankruptcy Code,
first priority priming liens and security interests, subject only
to (A) the Carve-Out (as hereinafter defined) and (B) any
non-avoidable, valid and perfected Permitted Liens (as defined in
the Amended Credit Agreement) in existence on the Petition Date and
any non-avoidable valid Permitted Liens (as defined in the Amended
Credit Agreement) in existence on the Petition Date that were
perfected subsequent to the Petition Date as permitted by section
546(b) of the Bankruptcy Code, in each case, other than the
Specified Primed Liens (as hereinafter defined) (collectively,
“Pre-Petition Permitted Liens”), in all of the
Collateral, including, without limitation, all Pacific Routes and
related Slots and Gate Leaseholds, and the proceeds and products
thereof, to secure the Loan Parties’ obligations under the
Loan Documents, including, without limitation, the Obligations;
(iv) for the Loan Parties to grant the Lenders administrative
super-priority in payment with respect to such obligations over any
and all administrative expenses of the kinds specified in sections
503(b), 507(b) and 546(c) of the Bankruptcy Code other than as
described below; and (v) for the Borrower to utilize the proceeds
of the Post-Petition Financing to fund, among other things, (a)
fees and expenses (including, without limitation, reasonable
attorneys’ fees and expenses) due and payable under the Loan
Documents, (b) the working capital needs of the Borrower and its
Subsidiaries from time to time, and (c) for other general corporate
purposes of the Borrower; and due and proper notice of the Motion
pursuant to Bankruptcy Rule 4001 having been given; and a hearing
on the Motion having been held before this Court on March 8, 2007;
and upon the entire record made at the hearing, and this Court
having found good and sufficient cause appearing
therefor;
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IT IS HEREBY FOUND AND
CONCLUDED that
:
A.
On September 14, 2005 (the “Petition Date”), the
Debtors each filed a voluntary petition for relief with this Court
under chapter 11 of the Bankruptcy Code (the “Chapter 11
Cases”). The Debtors are continuing in possession of
their property, and operating and managing their businesses, as
debtors-in-possession, pursuant to sections 1107 and 1108 of the
Bankruptcy Code.
B.
This Court has jurisdiction over the Chapter 11 Cases and the
Motion pursuant to 28 U.S.C. §§ 157(b) and 1334.
The Motion presents a core proceeding as defined in 28 U.S.C.
§ 157(b)(2). Pursuant to an order of the Court, the
Chapter 11 Cases have been consolidated for procedural purposes
only and are being jointly administered.
C.
Prior to the Petition Date, the Debtors entered into the
Pre-Petition Amended Credit Agreement and various facilities with
U.S. Bank National Association, including among others (i) that
certain Second Amended and Restated Reimbursement Agreement, dated
as of September 13, 2005, by and between Borrower and U.S. Bank
National Association (“U.S. Bank”), as amended, (ii)
that certain Second Amended and Restated Merchant Credit Card
Processing Agreement dated as of September 13, 2005, by and between
the Borrower and U.S. Bank relating to the processing of credit
cards, as amended, and (iii) that certain Amended and Restated
Guaranty by Borrower in favor of U.S. Bank, as amended, to secure
the obligations of MLT Inc. to U.S. Bank under that certain Amended
and Restated Credit Card Processing Agreement dated as of September
13, 2005, by and between MLT Inc. and U.S. Bank relating to the
processing of credit cards, as amended (collectively, the
“U.S. Bank Facility”). The Debtors also entered
into, with U.S. Bank, the Processing Agreements, the Co-Branded
Credit Card Agreement, the Corporate Credit Card Program and two
other L/C
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Facilities, each of which
capitalized terms is defined in the Final Order issued by this
Court on October 7, 2005. Such Final Order, together with the
Final Orders of this Court issued on January 27, 2006 and April 12,
2006 in respect of the L/C Facilities are hereinafter called the
“U.S. Bank Orders”.
D.
The first $150 million of obligations arising under or related to
the U.S. Bank Facility (the “Pari Passu Obligations”)
and the obligations under the $975 million Pre-Petition Amended
Credit Agreement were secured by pari passu first priority
liens on various aircraft and other assets owned by the Loan
Parties, including the Collateral (collectively, the
“Pre-Petition Collateral”).
E.
All obligations arising under or relating to the Pre-Petition
Amended Credit Agreement are referred to herein as the
“Repaid Obligations.”
F.
After the Pari Passu Obligations, the next $500 million of
obligations arising under or related to the U.S. Bank Facility (the
“Second Lien Obligations”) were secured by a Lien upon
the Pre-Petition Collateral subordinate to the Lien securing the
Repaid Obligations and the Pari Passu Obligations
.
G.
Prior to the Petition Date, the Debtors entered into (i) that
certain Payment Agreement, dated as of July 25, 2003, between the
Pension Benefit Guaranty Corporation (the “PBGC”) and
the Borrower, (ii) the Aircraft Mortgage and Security Agreement by
the Borrower in favor of PBGC and (iii) the Route Security
Agreement by the Borrower in favor of PBGC (collectively, the
“PBGC Documents”). All obligations arising under
or related to the PBGC Documents (the “PBGC
Obligations”) were secured by a Lien upon the Pre-Petition
Collateral subordinate to the Lien securing the Repaid Obligations,
the Lien securing the Pari Passu Obligations and the Lien securing
the Second Lien Obligations.
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H.
Upon entry of the Original Order (as hereinafter defined), the
Debtors (i) caused the Liens on the Pre-Petition Collateral
securing the Repaid Obligations to be forever released and
discharged, and (ii) obtained secured financing with a priming Lien
on the Collateral with priority pari passu with the
Liens securing the Pari Passu Obligations and with priority over
the Liens securing the Second Lien Obligations and the PBGC
Obligations. Subsequent to the entry of the Original Order,
the PBGC Obligations were settled and resolved and the Liens
securing the PBGC Obligations were forever released and
discharged. Pursuant to the terms of the First Amendment, the
Loan Parties intend to amend the existing Intercreditor Agreement
among the Debtors, the A&C Agent, U.S. Bank and the PBGC
to reflect release of the Liens securing the PBGC Obligations, and
the changes in the definitions of Hedging Obligations and
Obligations under the Amended Credit Agreement (the existing
Intercreditor Agreement, as amended and restated as anticipated in
the First Amendment (if so amended and restated) and as otherwise
amended from time to time, the “Intercreditor
Agreement”). Upon entry of this Order, the
Post-Petition Financing shall have a priming Lien on the Collateral
with priority pari passu with the Liens securing the
Pari Passu Obligations and with priority over the Liens securing
the Second Lien Obligations (collectively, the Pari Passu
Obligations and the Second Lien Obligations are referred to herein
as the “Surviving Obligations”) pursuant to section
364(d)(1) of the Bankruptcy Code and the terms of the Intercreditor
Agreement. The Liens on the Collateral securing the Surviving
Obligations are collectively referred to herein as the
“Specified Primed Liens”.
I.
Continuing the Post-Petition Financing will permit the Debtors to
continue to pay employees, maintain business relationships with
vendors, suppliers and customers, make capital expenditures and
satisfy other working capital and operational needs, and
otherwise
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finance their operations at a
materially lower price than under the Pre-Petition Amended Credit
Agreement or under the Original Order. The Post-Petition
Financing will also create certainty with respect to exit
financing, at an attractive cost. Accordingly, replacing the
Repaid Obligations with the Post-Petition Financing was, and
amending and restating the post-petition financing under the
Original Order is, in the best interests of the Debtors’
estates and creditors.
J.
The Debtors are unable to achieve their stated business goals
solely with the use of cash collateral and are unable to obtain
unsecured credit allowable under section 503(b)(l) of the
Bankruptcy Code as an administrative expense. Financing on a
post-petition basis is not otherwise available without the Loan
Parties’ granting, pursuant to section 364(c)(1) of the
Bankruptcy Code, claims having priority over any and all
administrative expenses of the kinds specified in sections 503(b),
507(b), and 546(c) of the Bankruptcy Code other than as described
below, and securing such indebtedness and obligations with the
security interests in and the liens upon the Collateral as
described below pursuant to sections 364(c) and (d) of the
Bankruptcy Code.
K.
All of the holders of the Surviving Obligations, or their duly
authorized representatives, have consented to the Post-Petition
Financing, including, without limitation, the terms and conditions
of the Original Order and this Order. Moreover, pursuant to
paragraph 9 hereof, the holders of the Surviving Obligations are
granted certain adequate protection Liens on all Collateral upon
which they were not granted Liens prior to the Petition Date.
As set forth below, the Surviving Obligations shall remain
outstanding after consummation of the Post-Petition Financing and
the Liens upon the Collateral securing
