Document:

EX-10.16 FIRST AMENDMENT TO BLOCKED AGREEMENT

 

Exhibit 10.16

FIRST AMENDMENT TO BLOCKED ACCOUNT AGREEMENT

     THIS FIRST AMENDMENT TO BLOCKED ACCOUNT AGREEMENT (this “Amendment”) is made as of the 25 day
of May, 2005 by and among WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
(“Bank”), WORLD AIRWAYS, INC., a Delaware corporation (“Company”), and CITIBANK, N.A., as
Collateral Agent (“Agent”), for the benefit of itself and the Lenders, the Board and the
Supplemental Guarantor (as such terms are defined in the Loan Agreement referenced below).

R E C I T A L S:

     Pursuant to that certain Loan Agreement dated as of December 30, 2003 among the Company, the
Agent, the Board, the Lenders and the other parties signatory thereto (as amended, restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”), the Lenders have
agreed to make loans and extend other financial accommodations to Company.

     To secure the obligations under the Loan Agreement, the Bank, the Company and the Agent
entered into that certain Blocked Account Agreement dated December 30, 2003.

     The Bank, the Company and the Agent desire to amend the Blocked Account Agreement upon the
terms and conditions hereinafter set forth. Capitalized terms used in this Amendment which are not
otherwise defined in this Amendment shall have the respective meanings assigned to them in the
Blocked Account Agreement.

     NOW, THEREFORE, in consideration of the Recitals and the mutual promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Bank, the Company and the Agent, intending to be legally bound hereby, agree as
follows:

     SECTION 1. Recitals. The Recitals are incorporated herein by reference and shall be
deemed to be a part of this Amendment.

     SECTION 2. Amendments. The Blocked Account Agreement is hereby amended as set forth
in this Section 2.

(a) Exhibit A to the Blocked Account Agreement is hereby amended and restated as
Exhibit A attached hereto and incorporated herein by this reference, and the Bank’s
representation in subsection (ii) of the section entitled “THE BLOCKED ACCOUNTS” shall be
deemed to refer to Exhibit A attached hereto and Schedule 1 as amended in subsection 2(d)
below.

(b) The section entitled “FEES” is hereby amended by deleting the last sentence
thereof.

(c) The section entitled “UNCOLLECTED FUNDS” is hereby amended by deleting the last
sentence thereof.

 

 

(d) Schedule 1 attached to the Blocked Account Agreement is hereby amended to delete
the following accounts, which are closed as of the date hereof:

	 	 	 
	Account No.	 	Title
	 
	2050000598968

	 	World Airways
	5025492677

	 	Trust Account

(e) The section “DEBTOR’S RIGHTS IN BLOCK ACCOUNTS” is hereby amended by amending and
restating the last sentence thereof in its entirety as follows:

By their signatures to this Agreement,
Company hereby authorizes and directs Bank, and Bank agrees,
to comply with the instructions of Agent directing disposition
of the funds without further consent of Company and, upon
Agent’s delivery of a Notice of Exclusive Control and Agent’s
wire instructions to Bank, to forward funds to such account
as may be designated by Agent to Bank in writing from time to
time; provided, however, that any Receipt deposited to any
Blocked Account shall not be released by Bank until such
Receipt has been fully and completely honored as verified by
Bank.

     SECTION 3. No Other Amendment. Except for the amendments set forth above, the text of
the Blocked Account Agreement shall remain unchanged and in full force and effect. This Amendment
is not intended to effect, nor shall it be construed as, a novation. The Blocked Account Agreement
and this Amendment shall be construed together as a single agreement. Nothing herein contained
shall waive, annul, vary or affect any provision, condition, covenant or agreement contained in the
Blocked Account Agreement, except as herein amended, nor affect nor impair any rights, powers or
remedies under the Blocked Account Agreement as hereby amended. The parties hereto hereby
expressly agree that the Blocked Account Agreement, as amended, is in full force and effect.

     SECTION 4. Counterparts. This Amendment may be executed in multiple counterparts,
each of which shall be deemed to be an original and all of which, taken together, shall constitute
one and the same agreement.

     SECTION 5. Governing Law. This Amendment shall be construed in accordance with and
governed by the law of the State of Georgia.

     SECTION 6. Effective Date. This Amendment shall be effective as of the date set forth
hereinabove.

[signature pages follow]

- 2 -

 

     IN WITNESS WHEREOF, the parties hereto have executed and delivered, or have caused their
respective duly authorized officers or representatives to execute and deliver, this Amendment as of
the day and year first above written.

	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Michael J. Romano
 

Michael J. Romano
	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	WORLD AIRWAYS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Gilberto M. Duarte, Jr.
 

Gilberto M. Duarte, Jr.
	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CITIBANK, N.A., as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Fernando Moreyra
 

Fernando Moreyra
	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 

Exhibit A

 

 

EXHIBIT A

See Attached

Exhibit AEX-10.17 BLOCKED ACCOUNT AGREEMENT

 

Exhibit 10.17

Execution Version

BLOCKED ACCOUNT CONTROL AGREEMENT

(“Shifting Control”)

     AGREEMENT dated as of April 27, 2005, by and among North American Airlines, Inc. (“Company”),
Citibank, N.A., as Collateral Agent (“Collateral Agent”) and Citibank, N.A. (“Depositary”).

     The parties hereto refer to Account No. 077 47393 in the name of Company maintained at
Depositary (the “Account”) and hereby agree as follows:

     1. Company and Collateral Agent notify Depositary that by separate agreement Company has
granted Collateral Agent a security interest in the Account and all funds on deposit from time to
time therein. Depositary acknowledges being so notified. The Account is a “deposit account”
within the meaning of Section 9-201 of the Uniform Commercial Code as in effect in the State of New
York (the “UCC”).

     2. Prior to the Effective Time (as defined below) Depositary shall honor all withdrawal,
payment, transfer or other fund disposition or other instructions which the Company is entitled to
give under the Account Documentation (as hereinafter defined) (collectively, “instructions”)
received from the Company (but not those from Collateral Agent) concerning the Account. On and
after the Effective Time (and without Company’s consent), Depositary shall honor all instructions
received from Collateral Agent (but not those from Company or any other person) concerning the
Account and Company shall have no right or ability to access or withdraw or transfer funds from the
Account. From and after the Effective Time, Depositary shall send a copy of all statements,
confirmations and other correspondence concerning the Account to the Collateral Agent at its
address set forth on the signature page hereto.

For the purposes hereof, the “Effective Time” shall be the opening of business on the second
business day next succeeding the business day on which a notice purporting to be signed by
Collateral Agent in substantially the same form as Exhibit A, attached hereto, with a copy of this
Agreement attached thereto (a “Shifting Control Notice”), is actually received by the individual
employee of Depositary to whom the notice is required hereunder to be addressed; provided, however,
that if any such notice is so received after 12:00 noon, New York City time, on any business day,
the “Effective Time” shall be the opening of business on the third business day next succeeding the
business day on which such receipt occurs; and, provided further, that a “business day” is any day
other than a Saturday, Sunday or other day on which Depositary is or is authorized or required by
law to be closed.

Notwithstanding the foregoing: (i) all transactions involving or resulting in a transaction
involving the Account duly commenced by Depositary or any affiliate prior to the Effective Time and
so consummated or processed thereafter shall be deemed not to constitute a violation of this
Agreement; and (ii) Depositary and/or any affiliate may (at its discretion and without any
obligation to do so) (x) cease honoring Company’s instructions and/or commence honoring solely
Collateral Agent’s instructions concerning the Account at any time or from time to time after it
becomes aware that Collateral Agent has sent to it a Shifting Control Notice but prior to the
Effective Time therefor (including without limitation halting, reversing or redirecting any
transaction referred to in clause (i) above), or (y) deem a Shifting Control Notice to be received
by it for purposes of the foregoing paragraph prior to the specified individual’s actual receipt if
otherwise actually received by Depositary (or if such Shifting Control Notice contains minor
mistakes or other irregularities but otherwise substantially complies with the form attached hereto
as Exhibit A or does not attach an appropriate copy of this Agreement), with no liability
whatsoever to Company or any other party for doing so.

     3. This Agreement supplements, rather than replaces, Depositary’s deposit account agreement,
terms and conditions and other standard documentation in effect from time to time with respect to
the Account or services provided in connection with the Account (the “Account Documentation”),
which Account Documentation will continue to apply to the Account and such services, and the respective
rights, powers, duties, obligations, liabilities and responsibilities of the parties thereto and
hereto, to the extent not expressly conflicting with the provisions of this Agreement (however, in
the event of any such conflict, the provisions

 

 

of this Agreement shall control). Prior to issuing
any instructions on or after the Effective Time, Collateral Agent shall provide Depositary with
such documentation as Depositary may reasonably request to establish the identity and authority of
the individuals issuing instructions on behalf of Collateral Agent. Collateral Agent may request
the Depositary to provide other services (such as automatic daily transfers) with respect to the
Account on or after the Effective Time; however, if such services are not authorized or otherwise
covered under the Account Documentation, Depositary’s decision to provide any such services shall
be made in its sole discretion (including without limitation being subject to Company and/or
Collateral Agent executing such Account Documentation or other documentation as Depositary may
require in connection therewith).

     4. Depositary agrees not to exercise or claim any right of offset, banker’s lien or other
like right against the Account for so long as this Agreement is in effect except with respect to
(i) returned or charged-back items, reversals or cancellations of payment orders and other
electronic fund transfers or other corrections or adjustments to the Account or transactions
therein, (ii) overdrafts in the Account or (iii) Depositary’s charges, fees and expenses with
respect to the Account or the services provided hereunder.

     5. Notwithstanding anything to the contrary in this Agreement: (i) Depositary shall have
only the duties and responsibilities with respect to the matters set forth herein as is expressly
set forth in writing herein and shall not be deemed to be an agent, bailee or fiduciary for any
party hereto; (ii) Depositary shall be fully protected in acting or refraining from acting in good
faith without investigation on any notice (including without limitation a Shifting Control Notice),
instruction or request purportedly furnished to it by Company or Collateral Agent in accordance
with the terms hereof, in which case the parties hereto agree that Depositary has no duty to make
any further inquiry whatsoever; (iii) it is hereby acknowledged and agreed that Depositary has no
knowledge of (and is not required to know) the terms and provisions of the separate agreement
referred to in paragraph 1 above or any other related documentation or whether any actions by
Collateral Agent (including without limitation the sending of a Shifting Control Notice), Company
or any other person or entity are permitted or a breach thereunder or consistent or inconsistent
therewith, (iv) Depositary shall not be liable to any party hereto or any other person for any
action or failure to act under or in connection with this Agreement except to the extent such
conduct constitutes its own willful misconduct or gross negligence (and to the maximum extent
permitted by law, shall under no circumstances be liable for any incidental, indirect, special,
consequential or punitive damages); and (v) Depositary shall not be liable for losses or delays
caused by force majeure, interruption or malfunction of computer, transmission or
communications facilities, labor difficulties, court order or decree, the commencement of
bankruptcy or other similar proceedings or other matters beyond Depositary’s reasonable control.

     6. Company hereby agrees to indemnify, defend and save harmless Depositary against any loss,
liability or expense (including reasonable fees and disbursements of counsel who may be an employee
of Depositary) (collectively, “Covered Items”) incurred in connection with this Agreement or the
Account (except to the extent due to Depositary’s willful misconduct or gross negligence) or any
interpleader proceeding relating thereto or incurred at Company’s direction or instruction.

     7. Depositary may terminate this Agreement (a) in its discretion upon the sending of at least
thirty (30) days’ advance written notice to the other parties hereto or (b) because of a material
breach by Company or Collateral Agent of any of the terms of this Agreement or the Account
Documentation, upon the sending of at least five (5) days advance written notice to the other
parties hereto. Collateral Agent may terminate this Agreement in its discretion upon the sending
of at least three (3) days advance written notice to the other parties hereto. Any other
termination or any amendment or waiver of this Agreement shall be effected solely by an instrument
in writing executed by all the parties hereto. The provisions of paragraphs 5 and 6 above shall
survive any such termination.

     8. Company shall compensate Depositary for the opening and administration of the Account and
services provided hereunder in accordance with Depositary’s fee schedules from time to time in
effect. Payment will be effected by a direct debit to the Account.

2

 

     9. Except for the claims and interest of the Collateral Agent, the Depositary does not know
of any claim to or interest in the Account.

     10. This Agreement: (i) may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument; (ii) shall become effective when counterparts hereof have been signed and delivered by
the parties hereto; and (iii) shall be governed by and construed in accordance with the laws of the
State of New York. The State of New York shall be the Depositary’s jurisdiction for purposes of
the UCC (including, without limitation, Section 9-304 thereof). All parties hereby waive all
rights to a trial by jury in any action or proceeding relating to the Account or this Agreement.
All notices under this Agreement shall be in writing and sent (including via facsimile
transmission) to the parties hereto at their respective addresses or fax numbers set forth below
(or to such other address or fax number as any such party shall designate in writing to the other
parties from time to time).

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
above written.

	 	 	 	 	 	 	 
	NORTH AMERICAN AIRLINES, INC.	 	CITIBANK, N.A., as Collateral Agent
	 
	 	 	 	 	 	 
	By:

	 	/s/ Steven E. Harfst	 	By:
	 	/s/ Fernando Moreyra
	 

	 	

Name: Steven E. Harfst
	 	
Name:
Fernando Moreyra
	 

	 	Title: Chief Operating Officer
	 	 	Title: Assistant Vice President
	 
	 	 	 	 	 	 
	Address for                                         	 	 	 	Citibank, N.A.
	Notices:                                               	 	 	Agency & Trust Department
	 

	 	                                             

	 	 	 	388 Greenwich Street
	 

	 	                                             

	 	 	 	14th Floor
	 

	 	Fax No.:                              

	 	 	 	New York, NY 10013
	 

	 	 	 	 	 	Attn: Fernando Moreyra, AVP
	 

	 	 	 	 	 	Fax No.: 212-816-5530
	 
	 	 	 	 	 	 
	CITIBANK, N.A.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ William J. Reynolds
 

Name: William J. Reynolds
	 	 	 	 
	 

	 	Title: Vice President	 	 	 	 
	 
	 	 	 	 	 	 
	Address	 	 	 	 
	For Notices Citibank, N.A.	 	 	 	 
	 

	 	Branch #86
	 	 	 	 
	 	 	JFK International Airport – Building #72

	 	 	Jamaica, NY 11430

	 	 	Attention: William J. Reynolds, Jr.

	 	 	Fax No.: 718-632-0082

3

 

 

 

EXHIBIT A

[to be placed on Collateral Agent letterhead]

BLOCKED ACCOUNT AGREEMENT

SHIFTING CONTROL NOTICE

_______________, ____

Citibank, N.A.

[Address]

Attention:                    

	 	 	 	 	 
	 

	 	Re:
	 	Blocked Account Control Agreement dated as of April
27, 2005 (the “Agreement”) by and among Citibank, N.A., as
Collateral Agent, North American Airlines, Inc. and Citibank,
N.A.

Ladies and Gentlemen:

This constitutes a Shifting Control Notice as referred to in paragraph 2 of the Agreement, a copy
of which is attached hereto.

	 	 	 	 	 	 	 
	 	 	CITIBANK, N.A., as Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 
	 	 

Signature
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:

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