AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT

AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT

Dated as of September 3, 2008

among

MIDWEST AIRLINES, INC.,

as the Borrower,

MIDWEST AIR GROUP, INC.,

as Parent,

THE SUBSIDIARIES OF

MIDWEST AIRLINES, INC.,

as Guarantors,

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,

as Administrative Agent and as Collateral Agent,

and

The Lenders Party Hereto

 

 

 

 

TABLE OF CONTENTS

1.01	Defined Terms

 

1.02	Other Interpretive Provisions

 

1.03	Accounting Terms

 

1.04	References to Agreements and Laws

 

1.05	Times of Day

 

1.06	Uniform Commercial Code.

 

 

 

 

 

7.01

Liens

 

7.02	Investments

 

7.03	Indebtedness

 

7.04	Guarantees and Other Liabilities

 

7.05	Fundamental Changes

 

7.06	Dispositions

 

7.07	Restricted Payments

 

7.08	Change in Nature of Business

 

7.09	Transactions with Affiliates

 

7.10	Use of Proceeds

 

7.11	Amendments of Organization Documents

 

7.12	Changes in Fiscal Year

 

7.13	Prepayments, Etc. of Indebtedness

 

7.14	Partnerships, Etc

 

7.15	Speculative Transactions

 

7.16	Formation of Subsidiaries

 

7.17	Change in Capital Structure

 

7.18	Repayments of Reimbursement Obligations

 

7.19	Amendments to Reimbursement Agreement

 

7.20	Sales and Leasebacks

 

7.21	Negative Pledge Clauses

 

7.22	Clauses Restricting Subsidiary Distributions

 

 

 

 

 

 

 

12.01

Amendments, Etc.

 

12.02

Notices and Other Communications; Facsimile Copies

 

12.03

No Waiver; Cumulative Remedies

 

12.04

Attorney Costs, Expenses and Taxes

 

12.05

Indemnification by the Borrower

 

12.06

Payments Set Aside

 

12.07

Successors and Assigns

 

12.08

Setoff

 

12.09

Interest Rate Limitation

 

12.10

Counterparts

 

12.11

Integration

 

12.12

Survival of Representations and Warranties

 

12.13

TPG Entities as Lenders

 

12.14

Severability

 

12.15

Tax Forms

 

12.16

Governing Law

 

12.17

Waiver of Right to Trial by Jury

 

12.18

Binding Effect

 

12.19

Reaffirmation of Guaranty and Grant of Security

 

12.20

Consent of Existing Lenders

 

12.21

No Novation

 

 

 

 

 

AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT

PRELIMINARY STATEMENTS

                         

 

“ 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):

 

(i)marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing no more than 180 days after such date; (ii) commercial paper issued by domestic corporations or institutions, states or municipalities maturing no more than 180 days after such date if such commercial paper, at the time of the acquisition thereof, has a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) certificates of deposit or bankers’ acceptances maturing no more than 180 days after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has net assets of not less than $1,000,000,000 and that has a rating of at least AA from S&P or at least Aa from Moody’s; and (iv) shares of any money market mutual fund registered with the SEC under Rule 2a-7 that guarantees 100% same day liquidity and has net assets not less than $1,000,000,000.

 

“ 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:

 

(a)           Parent ceases to be the direct owner of record and the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934) of 100% of the Equity Interests of Borrower; or

 

(b)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) other than any Permitted Holder becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has a right acquire (such right, an “ option right ”), whether such option right is exercisable immediately or only after the passage of time), directly or indirectly, of 20% or more of the voting power or economic interests of the Equity Interests of Borrower, Parent, Midwest Management Holdings, LLC, a Delaware limited liability company or Midwest Air Partners, LLC,  a Delaware limited liability company (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right).

 

“ 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.

 

(b)           the Tax Trust Accounts and the contents thereof;

 

(c)           any permit or license issued by a Governmental Authority to any Loan Party or any agreement or property subject to any agreement to which any Loan Party is a party, in each case, only to the extent and for so long as the terms of such permit, license or agreement or any Laws applicable thereto, validly prohibit the creation by such Loan Party of a security interest in such permit, license, agreement or property in favor of the Collateral Agent (after giving effect to Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or provisions) or any other applicable law (including the Bankruptcy Code) or principles of equity);

 

(d)           any Loan Party’s leasehold interest in any aircraft, airframe, engine or part to the extent that the applicable lease validly prohibits the creation by such Loan Party of a security interest in such leasehold interest, and any aircraft, airframe, engine or part subject to a Lien permitted under Section 7.01(b); and

 

(e)           all Gates and Routes;provided, however, that Excluded Assets shall not include any Proceeds (as defined in the UCC), substitutions or replacements of any Excluded Assets referred to in clause (a), (b), (c) or (d) (unless such Proceeds, substitutions or replacements would constitute Excluded Assets referred to in clause (a), (b), (c) or (d)).

 

 

(b)           all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)           net obligations of such Person under any Swap Contract;

 

(d)           all obligations of such Person to pay the deferred purchase price of property or services (other than current trade accounts payable in the ordinary course of business);

 

(e)           indebtedness secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f)           capital leases, operating leases and Synthetic Lease Obligations;

 

(g)           all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such Equity Interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

 

(h)           all Guarantees of such Person in respect of any of the foregoing.

 

 

  (a)       with respect to the sale of any asset by any Loan Party, the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such sale (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the principal amount of any Indebtedness that is secured by such asset and that is required to be repaid in connection with the sale thereof (other than Indebtedness under the Loan Documents), (B) the out-of-pocket expenses (including brokerage fees) actually incurred by such Loan Party in connection with such sale and (C) taxes reasonably estimated by the Borrower to be actually payable within one year of the date of the relevant asset sale in connection therewith documented in form and substance reasonably satisfactory to the Administrative Agent and each Significant Lender; and

“ 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:

 

(a)   The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b)   (i)  The words “ herein ,” “ hereto ,” “ hereof ” and “ hereunder ” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

 

(ii)   Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

 

(iii)   The term “ including ” is by way of example and not limitation.

 

(iv)   The term “ documents ” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(c)   In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .”

 

(d)   Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any 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.

 

2.01   The Term Loans .

 

(a)   Borrowing of Term Loans on the Amendment and Restatement Effective Date .  Subject to the terms and conditions hereof, each Lender severally agrees to make, on the Amendment and Restatement Effective Date, a Term Loan to Borrower in an amount equal to such Lender’s Term Commitment set forth opposite such Lender’s name on Schedule 2.01(a).  Borrower may make only one Term Borrowing under this Section 2.01(a) which Term Borrowing shall be on the Amendment and Restatement Effective Date.  Any amount borrowed under this Section 2.01(a) and subsequently repaid or prepaid may not be reborrowed.  Each Lender’s Term Commitment set forth opposite such Lender’s name on Schedule 2.01(a) shall terminate immediately and without further action on the Amendment and Restatement Effective Date after giving effect to the funding of such Lender’s Term Commitment set forth opposite such Lender’s name on Schedule 2.01(a) on such date.

 

(b)   Borrowing Mechanics of Term Loans on the Amendment and Restatement Effective Date .  Borrower shall deliver to Administrative Agent a fully executed Loan Notice no later than 10:00 a.m. (New York City time) on the Amendment and Restatement Effective Date with respect to the Term Loan Borrowing under Section 2.01(a).  Promptly upon receipt by Administrative Agent of such Loan Notice, Administrative Agent shall notify each Lender of its Pro Rata Share of the proposed Term Borrowing.  Each Lender shall make such Term Loan available to Borrower not later than 3:00 p.m. (New York City time) on the Amendment and Restatement Effective Date by wire transfer of same day funds in Dollars to the Special Controlled Account.

 

(c)   Borrowing of Term Loans on or after the Milestone Achievement Date .  Subject to the terms and conditions hereof, each Lender severally agrees to make, on or after the Milestone Achievement Date, a Term Loan to Borrower in an amount equal to such Lender’s Term Commitment set forth opposite such Lender’s name on Schedule 2.01(c).  Borrower may make only one Term Borrowing under this Section 2.01(c) which Term Borrowing shall be on or (subject to the continued satisfaction of the conditions set forth in Section 4.02) after the Milestone Achievement Date.  Any amount borrowed under this Section 2.01(c) and subsequently repaid or prepaid may not be reborrowed.  Each Lender’s Term Commitment set forth opposite such Lender’s name on Schedule 2.01(c) shall terminate immediately and without further action on or after the Milestone Achievement Date after giving effect to the funding of such Lender’s Term Commitment set forth opposite such Lender’s name on Schedule 2.01(c) on the date of the Term Borrowing of such Term Loans.

 

(d)   Borrowing Mechanics of Term Loans on or after the Milestone Achievement Date .  Borrower shall deliver to Administrative Agent a fully executed Loan Notice no later than 10:00 a.m. (New York City time) on the Milestone Achievement Date (or, if the Borrower elects to make such Term Borrowing under Section 2.01(c) on a date after the Milestone Achievement Date, no later than 10:00 a.m. (New York City time) on the date that is at least three Business Days prior to the proposed date of such Term Borrowing) with respect to the Term Loan Borrowing under Section 2.01(c).  Promptly upon receipt by Administrative Agent of such Loan Notice, Administrative Agent shall notify each Lender of its Pro Rata Share of the proposed Term Borrowing.  Each Lender shall make such Term Loan available to Borrower not later than 3:00 p.m. (New York City time) on the Milestone Achievement Date (or, if the Borrower elects to make such Term Borrowing under Section 2.01(c) on a date after the Milestone Achievement Date, the date for such Term Borrowing set forth on the Loan Notice for such Term Borrowing subject to the continued satisfaction of the conditions set forth in Section 4.02) by wire transfer of same day funds in Dollars to the Special Controlled Account.

2.02   Prepayments .

 

(a)   Optional .  The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Term Loans in whole or in part without premium or penalty; provided that such notice must be received by the Administrative Agent not later than 11:00 a.m. three days prior to the date of prepayment.   Each such notice shall specify the date and amount of such prepayment.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Pro Rata Share of such prepayment.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Each such prepayment shall be paid to the Lenders in accordance with their respective Pro Rata Shares.

 

(b)   Mandatory .  (i)  If any Loan Party Disposes of any property or assets permitted by Section 7.06 (other than Section 7.06(b) ), the Borrower shall prepay (x) an aggregate principal amount of Term Loans equal to the Credit Pro Rata Share of 100% of all Net Cash Proceeds received therefrom and (y) an aggregate principal amount of Reimbursement Obligations equal to the Reimbursement Pro Rata Share of 100% of all Net Cash Proceeds received therefrom, in each case, immediately upon receipt thereof by any Loan Party.

 

(ii)           Upon the issuance by any Loan Party of any of its capital stock or other Equity Interests to any Person other than another Loan Party (or the receipt of any capital contribution by any Loan Party from any Person other than another Loan Party), the Borrower shall prepay (x) an aggregate principal amount of Term Loans equal to the Credit Pro Rata Share of 100% of all Net Cash Proceeds received therefrom and (y) an aggregate principal amount of Reimbursement Obligations equal to the Reimbursement Pro Rata Share of 100% of all Net Cash Proceeds received therefrom, in each case, immediately upon receipt thereof by any Loan Party.

 

(iii)           Upon the incurrence or issuance by any Loan Party of any Indebtedness (other than Indebtedness permitted to be incurred under Section 7.03 of this Agreement) to any Person other than another Loan Party, the Borrower shall prepay (x) an aggregate principal amount of Term Loans equal to the Credit Pro Rata Share of 100% of all Net Cash Proceeds received therefrom and (y) an aggregate principal amount of Reimbursement Obligations equal to the Reimbursement Pro Rata Share of 100% of all Net Cash Proceeds received therefrom, in each case, immediately upon receipt thereof by any Loan Party.

 

(iv)           Upon any Extraordinary Receipt (including proceeds in respect of an Event of Loss) received by or paid to or for the account of any Loan Party and not otherwise included in clause (i), (ii) or (iii) of this Section 2.02(b) , the Borrower shall prepay (x) an aggregate principal amount of Term Loans equal to the Credit Pro Rata Share of 100% of all net cash proceeds received therefrom and (y) an aggregate principal amount of Reimbursement Obligations equal to the Reimbursement Pro Rata Share of 100% of all net cash proceeds received therefrom, in each case, immediately upon receipt thereof by any Loan Party.

 

(v)           Simultaneously with any repayment of any Reimbursement Obligations (or any deposits into the Reimbursement Obligation Collateral Account), except with respect to prepayments to the extent set forth in Subsections 2.02(b)(i) through 2.02(b)(iv) , the Borrower shall prepay an aggregate principal amount of the Term Loans equal to (x) the amount of such repayment of Reimbursement Obligations multiplied by (y) the Lender Make Whole.

 

(c)   Prepayments to Include Accrued Interest, Etc .  All prepayments under this Section 2.02 shall be made together with accrued and unpaid interest to the date of such prepayment on the principal amount so prepaid.

 

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.

 

2.04   Interest .

 

(a)   Interest Rate .  Subject to the provisions of subsection (b) below, the Term Loans shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the Applicable Rate.

 

(b)   Default Rate .  Upon the occurrence and during the continuance of a Event of Default, the Borrower shall pay interest on (i) the unpaid principal amount of each Term Loan owing to each Lender, payable in arrears on the dates referred to in clause (c) below and on demand, at a rate per annum equal at all times to 2% per annum above the Applicable Rate and (ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount payable under the Loan Documents that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable on demand, at a rate per annum equal at all times to 2% above the Applicable Rate.

 

(c)   Payment Dates .  Interest on each Term Loan shall be due and payable in arrears on each Interest Payment Date and, to the extent provided in Section 2.04(b) , on demand.

 

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.

 

2.06   Evidence of Indebtedness .

 

(a)   The Term Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Term Loans made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender, the Borrower shall execute and deliver to such Lender a Term Note, which shall evidence such Lender’s Term Loans in addition to such accounts or records.  Each Lender may attach schedules to its Term Note and endorse thereon the date, amount and maturity of its Term Loans and payments with respect thereto.

 

(b)   Entries made in good faith by the Administrative Agent in the Register or by any Lender in its account or accounts pursuant to subsection (a) above, shall be conclusive evidence of the amount of principal and interest due and payable or to become due and payable from the Borrower to, in the case of the Register, each Lender and, in the case of such account or accounts, such Lender, under this Agreement and the other Loan Documents, absent manifest error; provided that the failure of the Administrative Agent or such Lender to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrower under this Agreement and the other Loan Documents.

 

2.07   Payments Generally.

 

(a)   All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the account specified by the Administrative Agent in Dollars and in immediately available funds not later than 2:00 p.m. on the dates specified herein.  The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to the account specified by such Lender to the Administrative Agent from time to time.  All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest shall continue to accrue.

 

(b)   If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest.

 

(c)If any Lender makes available to the Administrative Agent funds for any Term Loan to be made by such Lender as provided in the foregoing provisions of this Article II , and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the Term Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall promptly return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

(d) The obligations of the Lenders hereunder to make Term Loans are several and not joint.  The failure of any Lender to make any Term Loan on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Term Loan.

 

(e)   Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the order of priority set forth in Section 8.03 .  If the Administrative Agent receives funds for application to the Obligations of the Loan Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the manner in which such funds are to be applied, the Administrative Agent may, but shall not be obligated to, elect to distribute such funds to each of the Lenders in accordance with such Lender’s Pro Rata Share of the sum of the aggregate principal amount of all Term Loans outstanding at such time in repayment or prepayment of such of the outstanding Term Loans or other Obligations then owing to such Lender.

 

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.

                               

 

(a)   Except as otherwise provided in this Section 3.01 or Section 12.14 , any and all payments by the Borrower to or for the account of the Administrative Agent, the Collateral Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding , in the case of the Administrative Agent, the Collateral Agent and each Lender, (i) taxes imposed on or measured by its overall net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent, the Collateral Agent or such Lender, as the case may be, is organized or maintains its Lending Office or is otherwise a resident or doing business (other than a jurisdiction in which such Person is deemed to be doing business solely as a result of entering into, or performing its obligations under, any Loan Document); and (ii) taxes other than taxes that are imposed as a result of a change in applicable Law occurring after (A) the date that such Person became a party to this Agreement, or (B) with respect to an assignment, acquisition, grant of a participation or the appointment of a successor Administrative Agent or Collateral Agent, the effective date of such assignment, acquisition, participation or appointment, except to the extent that such Person's predecessor was entitled to additional amounts with respect to such taxes under this Section 3.01 (all non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as “ Taxes ”).  If the Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent, the Collateral Agent or any Lender, then, except as otherwise provided in this Section 3.01 or Section 12.14 , (i) the sum payable shall be increased as necessary so that after making all required deductions with respect to Taxes (including deductions applicable to additional sums payable under this Section), each of the Administrative Agent, the Collateral Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such payment, the Borrower shall furnish to the Administrative Agent (which shall forward a copy of the same to the Collateral Agent and such Lender, as applicable) the original or a certified copy of a receipt evidencing payment thereof to the extent such a receipt is issued therefor, or other written proof of payment thereof that is satisfactory to the Administrative Agent and each Significant Lender.

 

(b)   In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property, intangible, mortgage recording taxes or similar charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as “ Other Taxes ”).

 

(c)   If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent, the Collateral Agent or any Lender, the Borrower shall also pay to the Administrative Agent, the Collateral Agent or to such Lender, as the case may be, at the time interest is paid, such additional amount that the Administrative Agent, the Collateral Agent or such Lender specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) that the Administrative Agent, the Collateral Agent or such Lender would have received if such Taxes or Other Taxes had not been imposed.

 

(d)   The Borrower agrees to indemnify the Administrative Agent, the Collateral Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent, the Collateral Agent and such Lender, (ii) amounts payable under Section 3.01(c) without duplication and (iii) any liability (including additions to tax, penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; but excluding amounts resulting from the failure to comply with the requirements of Section 12.05 .  Payment under this subsection (d) shall be made within 30 days after the date such Lender, the Collateral Agent or the Administrative Agent makes a demand therefor.

 

(e)   If the Administrative Agent, the Collateral Agent or any Lender determines, in its sole discretion, that is has actually received or realized any refund of tax, any reduction of, or credit against, its withholding or payment of any additional amount by the Borrower pursuant to this Section 3.01 , such Person shall reimburse the Borrower in an amount equal to the net benefit, after tax, and net of all expenses incurred by such Person in connection with such refund, reduction, credit or recovery; provided that nothing in this Section 3.01(e) shall require any Person to make available its tax returns (or any other information relating to its taxes which it deems to be confidential) or interfere with any Person's right to arrange its tax affairs in whatever manner it deems fit or to obligate any Person to claim any credit.  The Borrower shall return such amount to the applicable Person in the event that such Person is required to repay such refund of tax or is not entitled to such reduction of, or credit against its tax liabilities.

 

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.

 

 

4.01   Amendment and Restatement Effective Date Conditions .  The obligation of Republic to make a Term Loan on the Amendment and Restatement Effective Date pursuant to Sections 2.01(a) and 2.01(b) shall become effective on the first date on which all of the following conditions precedent shall have been satisfied to the satisfaction of each Significant Lender:

 

(a)   The Administrative Agent’s and each Significant Lender’s (or, in the case of Subsections 4.01(a)(iii)(A) and 4.01(a)(xix), the Collateral Agent’s) receipt of the following, each of which shall be originals, facsimiles or in ‘PDF’ format by electronic mail (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Amendment and Restatement Effective Date (or, in the case of certificates of governmental officials, a recent date before the Amendment and Restatement Effective Date) and each in form and substance satisfactory to the Administrative Agent and each Significant Lender:

 

(i)   duly executed and completed counterparts hereof (in the form provided and specified by the Administrative Agent) that, when taken together, bear the signatures of (1) the Borrower, (2) each Guarantor, (3) the Administrative Agent, (4) the Collateral Agent and (5) each Lender;

 

(ii)   a Term Note executed by the Borrower in favor of each Lender requesting a Term Note;

 

(iii)   Each of the following:

 

(A)   to the extent consisting of shares of stock or other certificated securities, certificates representing the Initial Pledged Equity accompanied by undated stock powers executed in blank;

 

(B)   evidence (1) of the insurance required by the terms of this Agreement and the other Loan Documents and (2) that Collateral Agent on behalf of the Lenders has been named as additional insured and/or loss payee thereunder to the extent required under Section 6.07 ; and

 

(C)   completed requests for information, dated on or before the Amendment and Restatement Effective Date, listing all effective financing statements that name any Loan Party as debtor, together with copies of such financing statements.

 

(iv)   an amended and restated intellectual property security agreement, in substantially the form of Exhibit D hereto (the “ Intellectual Property Security Agreement ”), duly executed by each Loan Party;

 

(v)   such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent or any Significant Lender may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party;

 

(vi)   such documents and certifications as the Administrative Agent or any Significant Lender may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Loan Parties is validly existing and in good standing in its jurisdiction of organization;

 

(vii)   a favorable opinion of Cadwalader Wickersham & Taft LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance satisfactory to the Administrative Agent and each Significant Lender;

 

(viii)   a favorable opinion of Godfrey & Kahn, S.C., special Wisconsin counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, in form and substance satisfactory to the Administrative Agent and each Significant Lender;

 

(ix)   a favorable opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, special aviation counsel to the Lenders with regard to, among other things, (A) the granting of a security interest and perfection of the security interest in aircraft and engines owned by the Loan Parties in favor of the Collateral Agent, for itself and for the ratable benefit of the Secured Parties and (B) the absence of Liens (other than Liens granted in connection with this Agreement and the Reimbursement Agreement) on aircraft and engines and aircraft spare parts on which the Collateral Agent, for the benefit of the Secured Parties, is entitled to have a Lien, in each case, in form and substance satisfactory to the Administrative Agent and each Significant Lender;

 

(x)   a favorable opinion of the general counsel of the Borrower, addressed to the Administrative Agent and each Lender, in form and substance satisfactory to the Administrative Agent and each Significant Lender;

 

(xi)   a certificate of a Responsible Officer of each Loan Party either (A) listing all consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

 

(xii)   an amended and restated slot security agreement, in substantially the form attached hereto as Exhibit F (the “ Slot Security Agreement ”), duly executed by each Loan Party that owns Slots as of the Amendment and Restatement Effective Date;

 

(xiii)   amended and restated aircraft mortgage and security agreements, in substantially the form attached hereto as Exhibit G , duly executed by each Loan Party that owns any Airframes or Engines as of the Amendment and Restatement Effective Date;

 

(xiv)   an amended and restated spare parts security agreement, in substantially the form attached hereto as Exhibit H (the “ Spare Parts Security Agreement ”), duly executed by the Borrower;

 

(xv)   a copy of the the Associated Bank Control Agreement;

 

(xvi)   a copy of the Airline Service Agreement duly executed by each party thereto;

 

(xvii)   evidence that all registrations requested by Administrative Agent, Collateral Agent or any Significant Lender in accordance with the Cape Town Convention have been made and are (or will be) effective pursuant to the terms of the Cape Town Convention;

 

(xviii)   evidence that all FAA filings for Airframes, Engines and Pledged Spare Parts requested by Administrative Agent, Collateral Agent or any Significant Lender have been made and are (or will be) effective to perfect the Collateral Agent’s security interest in such Airframes, Engines and Pledged Spare Parts, as applicable;

 

(xix)   financing statements, in proper form for filing under the Uniform Commercial Code of all jurisdictions that the Administrative Agent and the Collateral Agent may deem necessary or desirable in order to perfect and protect the first priority liens and security interests created hereunder, covering the Collateral described in Article X ;

 

(b)   The Borrower shall have paid all Attorney Costs of (x) the Lenders, Administrative Agent and the Collateral Agent and (y) Republic relating to the negotiation and execution of the Airline Service Agreement;

 

(c)   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 Amendment and Restatement Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date;

 

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

 

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

 

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 ”).  Neithe