LOAN DOCUMENTS OR (C) THE ABILITY OF THE BORROWER TO
PERFORM ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS OR (2) PURPORTS TO AFFECT THE
LEGALITY, VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY LOAN DOCUMENT OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(VIII)
NO PROCEEDS OF THE LOAN 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.
(IX)
THE BORROWER HAS GOOD TITLE TO THE AIRCRAFT,
FREE AND CLEAR OF LIENS OTHER THAN THE PERMITTED LIENS. THE AIRCRAFT HAS BEEN
DULY CERTIFIED BY THE FAA AS TO TYPE AND AIRWORTHINESS, HAS BEEN INSURED BY THE
BORROWER IN ACCORDANCE WITH THE TERMS OF THE MORTGAGE AND IS IN THE CONDITION
AND STATE OF REPAIR REQUIRED UNDER THE TERMS OF THE MORTGAGE.
(X)
THE AGENT, AS SECURED PARTY UNDER THE
MORTGAGE, IS ENTITLED TO THE PROTECTION OF SECTION 1110 OF THE FEDERAL
BANKRUPTCY CODE IN CONNECTION WITH ITS RIGHT TO TAKE POSSESSION OF THE AIRFRAME
AND ENGINES SECURING THE LOAN IN THE EVENT OF A CASE UNDER CHAPTER 11 OF THE
FEDERAL BANKRUPTCY CODE IN WHICH THE BORROWER IS A DEBTOR.
(XI)
THE BORROWER IS NOT IN MATERIAL DEFAULT
UNDER ANY MATERIAL FINANCING (INCLUDING, WITHOUT LIMITATION, ANY OTHER FINANCING
PURSUANT TO THE LETTER AGREEMENT, THE FINANCING UNDER THE AIFS TERM LOAN IF
AIRBUS FINANCIAL SERVICES (FORMERLY AIRBUS
23
INDUSTRIE FINANCIAL SERVICES) OR AN AFFILIATE REMAINS AT RISK, ANY LEASE
FINANCING PURSUANT TO AN AIL TRUST, IF AIRBUS LEASING IV INC. (FORMERLY AI
LEASING IV, INC.) OR AN AFFILIATE REMAINS AT RISK, OR AN EETC PARTICIPATION, IF
AIRBUS OR AN AFFILIATE REMAINS AT RISK, OR FINANCING DRAWN UNDER A COMMITMENT
PROVIDED BY THE ENGINE MANUFACTURER IN RESPECT OF LETTER AGREEMENT AIRCRAFT) OR
UNDER THE AIRBUS PURCHASE AGREEMENT.
(XII)
AFTER DECEMBER 31, 2000 AND UNTIL SIXTY (60)
DAYS BEFORE THE DATE OF THE LOAN, THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN
THE FINANCIAL CONDITION OF THE BORROWER HAVING A MATERIAL ADVERSE EFFECT ON THE
BORROWER'S ABILITY TO PERFORM ITS MATERIAL OBLIGATIONS UNDER THE LOAN DOCUMENTS.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.1.
Affirmative Covenants. So long as the Loan shall remain unpaid,
the Borrower will:
(a)
Compliance with Laws, Etc.
Comply, and
cause each of its Subsidiaries to comply, in all respects, with all applicable
laws, rules, regulations and orders other than those the noncompliance with
which would not have a material adverse effect on the Consolidated business,
assets, properties or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole or on the ability of the Borrower to perform its
obligations under any Loan Document to which it is a party.
(b)
Payment of Taxes, Etc.
Pay and discharge,
and cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that,