CONSENT, WAIVER AND AMENDMENT dated as of January 29, 2004
(this "Consent and Waiver"), to the $168,000,000 Loan Agreement
dated as of November 20, 2002 (the "Loan Agreement"), among
AMERICAN TRANS AIR, INC. (presently known as ATA Airlines, Inc.),
an Indiana corporation (the "Borrower"); ATA HOLDINGS CORP., an
Indiana corporation (the "Parent" and, together with the Borrower,
"ATA"); GOVCO INCORPORATED, a Delaware corporation, as Primary
Tranche A Lender; CITIBANK, N.A., in its capacity as an alternate
lender to the Primary Tranche A Lender; CITICORP NORTH AMERICA,
INC., a Delaware corporation, as administrative agent for the
Primary Tranche A Lender and the commercial paper holders of the
Primary Tranche A Lender; CITIBANK, N.A., in its capacity as
Tranche B Lender; BEARINGPOINT, INC. (formerly KPMG Consulting,
Inc.), as Loan Administrator; CITIBANK, N.A., as Collateral Agent;
CITIBANK, N.A., as Agent; and AIR TRANSPORTATION STABILIZATION
BOARD, created pursuant to Section 102 of the Act referred to in
the Loan Agreement (the "Board").
A. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Loan Agreement.
B. Pursuant to the Loan Agreement, the Lenders have made available to
the Borrower a Loan for such general corporate purposes as are permissible under
the Act.
C. Pursuant to Section 10.1 of the Loan Agreement, so long as the
Board Guarantee is in full force and effect, the Board may, in its sole
discretion, consent to the amendment, modification or waiver of certain
provisions of the Loan Agreement.
D. ATA has informed the Board that the Parent intends to amend its
presently outstanding offers to exchange (i) its outstanding 10 1/2% Senior
Notes due 2004 (the "2004 Notes") for a new series of senior notes due 2009 (the
"2009 New Notes") and (ii) its outstanding 9 5/8% Senior Notes due 2005 (the
"2005 Notes") for a new series of senior notes due 2010 (the "2010 New Notes"
and, together with the 2004 Notes, the 2005 Notes and the 2009 New Notes, the
"Notes"). In connection with the foregoing amended exchanges, the Parent intends
to make certain prepayments of the 2004 Notes and the 2005 Notes. These amended
exchange transactions, as described in the Parent's confidential Offering
Memorandum dated January 9, 2004 as the same may be revised solely to the extent
provided for in clauses (a) through (d) of Section 3 below (the "Offering
Memorandum"), are referred to herein collectively as the "Exchange Offers").
E. In connection with the Exchange Offers, ATA has requested that the
Board (i) consent to the Parent's consummation of the Exchange Offers, (ii)
waive compliance by ATA with the provisions of Sections 2.4(f), 2.6(a), 6.2, 6.3
and 6.15 of the Loan Agreement, in each case solely to the extent necessary to
consummate the
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Exchange Offers and (iii) agree to amend the Loan Agreement and other Loan
Documents to the limited extent specified in Section 2 below.
F. The Board is willing to grant such consent and limited waiver and
agree to such amendment pursuant to the terms and subject to the conditions set
forth herein.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Consent and Waiver. Subject to the conditions set forth in
Section 3 hereof, the Board hereby consents to the Exchange Offers and waives
compliance by the Borrower and the Parent with the provisions of (i) Section
2.4(f) of the Loan Agreement, (ii) Section 2.6(a) of the Loan Agreement, (iii)
Section 6.2 of the Loan Agreement, (iv) Section 6.3 of the Loan Agreement, and
(v) Section 6.15 of the Loan Agreement, in each case to the extent, but only to
the extent, necessary to consummate the Exchange Offers.
SECTION 2. Amendments. Subject to the conditions set forth in Section
3 hereof, the Loan Agreement and the other Loan Documents shall be amended as
follows:
(a) The following defined terms shall be added to Section 1.1 of the
Loan Agreement:
"2009 Senior Notes" means the Senior Notes of the Parent due in
2009.
"2010 Senior Notes" means the Senior Notes of the Parent due in
2010.
"2009 Senior Notes Indenture" means the indenture relating to the
2009 Senior Notes.
"2010 Senior Notes Indenture" means the indenture relating to the
2010 Senior Notes.
(b) Section 6.3 of the Loan Agreement shall be amended to read, in
its entirety, as follows:
Restricted Payments. Neither the Parent nor the Borrower shall,
and neither of them shall permit any of their Subsidiaries to, directly or
indirectly, declare, order, pay, make or set apart any sum for any
Restricted Payment (which shall include payments by the Borrower in
satisfaction of obligations under the 9 5/8% Senior Notes Indenture, the
10 1/2% Senior Notes Indenture or any note issued under either of them (but
not under the 2009 Senior Notes Indenture, the 2010 Senior Notes Indenture
or any note issued under either of them), pursuant to
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the Borrower's guarantee of such obligations or otherwise, at any time when
the Borrower would be prohibited from making a Restricted Payment to the
Parent to fund such obligations); provided, however, that (a) so long as no
Default or Event of Default shall have occurred and be continuing, (i) the
Parent may (A) make required dividend payments in respect of the Series A
preferred stock of the Parent outstanding on the date hereof, (B) make
required dividend payments in respect of the Series B preferred stock of
the Parent outstanding on the date hereof, (C) pay cash in lieu of
fractional shares or scrip upon conversion of the Series B preferred stock
of the Parent to common shares of the Parent or upon exercise of the
Warrants, and (D) repurchase its common stock in any fiscal year in an
aggregate amount not to exceed $500,000; and (ii) the Borrower may make
Restricted Payments to the Parent (A) to enable the Parent to make the
payments permitted under clause (i) above, (B) to fund scheduled payments
of principal, interest and fees on the 9 5/8% Senior Notes and the 10 1/2%
Senior Notes and to fund scheduled payments of principal, interest and fees
on other Indebtedness (other than the 2009 Senior Notes and the 2010 Senior
Notes) not otherwise prohibited by this Agreement or any other Loan
Document, and (C) to enable the Parent or any of its Subsidiaries to enter
into transactions outside of the ordinary course of business and which are
not otherwise prohibited by this Agreement or any of the other Loan
Documents; (b) the Borrower may make Restricted Payments to the Parent (i)
to fund scheduled payments of principal, interest and fees on the 2009
Senior Notes and the 2010 Senior Notes, (ii) to pay or reimburse the
Borrower's share of the Parent's business expenses and overhead or
otherwise in the ordinary course of business consistent with past practice,
(iii) to pay or reimburse the Parent for Capital Stock (including options
on any such Capital Stock or related stock appreciation rights or similar
securities) purchases or redemptions from officers, directors or employees
of the Borrower or the Parent (or their estates or beneficiaries under
their estates) upon death, disability, retirement, termination of
employment or pursuant to the terms of any plan or any other agreement
under which such Capital Stock or related rights were issued, in an amount
not to exceed $5,000,000 per Fiscal Year and (iv) to pay or reimburse the
Parent for withholding taxes arising from cashless exercises of options or
warrants by officers, directors or employees for the Parent's Capital
Stock; and (c) any Wholly-Owned Subsidiary of the Parent (but in the case
of the Borrower, only to the extent otherwise permitted under this Section
6.3) may make dividend payments to the Parent.
(c) The following new Section 5.18 shall be added to the Loan
Agreement immediately after Section 5.17:
Section 5.18 Periodic Certificates. On the date that is 15 Business
Days prior to any date on which interest or principal is scheduled to be
paid under the 2009 Senior Notes or the 2010 Senior Notes, the Parent shall
deliver to the Board a certificate, signed by the Chief Financial Officer
of the Parent, certifying that, as of the date of such certificate, (i)
there exists no Default or Event of Default under Section 7.1(a) or 7.1(b)
of this Agreement and (ii) in the reasonable judgment of the Chief
Financial Officer, each of the Obligors, based on the then-existing
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liabilities and resources (including any additional Indebtedness then
permitted to be incurred under this Agreement) of the Parent and its
Subsidiaries, will be able to pay its debts as and when they come due
within the following 210 days.
(d) Subparagraph (c) of Section 7.1 of the Loan Agreement shall be
amended to read, in its entirety, as follows:
Failure of either Obligor to perform or comply in any material
respect with any term or condition contained in Section 2.4(f), 5.2, 5.10,
5.18 or 6.14 of this Agreement; or
(e) All references in the Loan Documents other than the Loan
Agreement to the 9 5/8% Senior Notes, the 9 5/8% Senior Note Indenture, the
10 1/2% Senior Notes, and the 10 1/2% Senior Note Indenture shall be deemed
to include reference, respectively, to the 2010 Senior Notes, the 2010
Senior Note Indenture, 2009 Senior Notes and the 2009 Senior Note
Indenture.
SECTION 3. Conditions to Consent and Waiver. The foregoing consent and
waiver of the Board is subject to the following conditions:
(a) the aggregate amount of prepayments on the 2004 Notes and the
2005 Notes, together with any consent fees paid to noteholders
participating in the Exchange Offers, incurred by ATA in connection with
the Exchange Offers shall not exceed $15,000,000;
(b) 2009 New Notes and 2010 New Notes shall not be issued in
principal amounts greater than $1,050 per $1,000 principal amount of 2004
Notes and 2005 Notes tendered, respectively;
(c) the Maturity Date (as used in the Offering Memorandum) of the
2009 New Notes shall not be earlier than February 1, 2009 and the Maturity
Date (as used in the Offering Memorandum) of the 2010 New Notes shall not
be earlier than June 15, 2010 (except for the scheduled principal payments
described in paragraph (e) of this Section);
(d) the interest payable per annum, absent default, on the
outstanding principal amount of the 2009 New Notes shall not be greater
than 13% through July 31, 2006 and 14% thereafter, and the interest payable
per annum, absent default, on the outstanding principal amount of the 2010
New Notes shall not be greater than 12.125% through June 14, 2006 and
13.125% thereafter;
(e) the aggregate amount of any scheduled principal payments or
scheduled sinking fund payments, other than principal payments on the
Maturity Dates, shall not exceed $8,750,000 in the case of the 2009 Senior
Notes, none of which shall be paid to the holders of the 2009 Senior Notes
before August 1, 2005, and $6,250,000 in the case of the 2010 Senior Notes,
none of which shall be paid to the holders of the 2010 Senior Notes before
June 15, 2005;
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(f) the minimum aggregate principal amount of 2004 Notes and 2005
Notes required to be validly tendered and not withdrawn as a condition to
ATA's consummation of the Exchange Offers shall not be less than $255
million in aggregate principal amount of 2004 Notes and 2005 Notes (without
regard to series) outstanding;
(g) all other terms and conditions, including, without limitation,
the covenants and events of default, of the 2009 New Notes, the 2010 New
Notes, and of their respective indentures, shall differ from those of the
2004 Notes and the 2005 Notes only to the extent expressly identified in
the Offering Memorandum under the heading Summary Description of the New
Notes - Comparison of the Terms of the New Notes to the Existing Notes;
(h) prior to or simultaneously with the closing of the Exchange
Offers, the parties to the various aircraft operating lease restructurings
described in the Offering Memorandum shall have entered into definitive and
binding agreements with respect thereto on the terms set forth in the BCSC
Restructuring Letter, the GECAS Restructuring Letter and the ILFC
Restructuring Letter (in each case, as defined in the Offering Memorandum);
(i) the closing of the Exchange Offers shall have occurred on or
before February 29, 2004; and
(j) each of the representations and warranties set out in Section 4
below is true and correct on and as of the closing date of the Exchange
Offers.
SECTION 4. Representations and Warranties. To induce the other parties
hereto to enter into this Consent and Waiver, the Borrower and the Parent each
represents and warrants to each other party hereto that:
(a) this Consent and Waiver has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms;
(b) all of the representations and warranties in the Loan Agreement,
after giving effect to this Consent and Waiver and the Exchange Offers, are
true and correct in all material respects (except that any representation
and warranty that is qualified as to "materiality" shall be true and
correct in all respects) on and as of the date hereof as if made on the
date hereof (or, if any such representation or warranty is expressly stated
to have been made as of a specific date, as of such specific date); and
(c) No Default or Event of Default has occurred and is continuing or,
after giving effect to this Consent and Waiver, would result from the
Exchange Offers.
SECTION 5. Effectiveness. This Consent and Waiver shall not become
effective until such time as the Loan Administrator shall have received
counterparts
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hereof which, when taken together, bear the signatures of the Borrower, the
Parent and the Board.
SECTION 6. Effect of Consent and Waiver. Except as expressly set forth
herein, this Consent and Waiver shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
the Board or the Borrower under the Loan Agreement or any other Loan Document,
and shall not alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Loan Agreement
or any other Loan Document, all of which are ratified and affirmed in all
respects and shall continue in full force and effect. Nothing herein shall be
deemed to entitle the Borrower or the Parent to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Loan Agreement or any
other Loan Document in similar or different circumstances. After the date
hereof, any reference to the Loan Agreement shall mean the Loan Agreement as
modified hereby. This Consent and Waiver shall constitute a "Loan Document" for
all purposes of the Loan Agreement and the other Loan Documents.
SECTION 7. Expenses. The Borrower agrees to pay, promptly upon
request, the reasonable out-of-pocket costs and expenses incurred by the Board,
the Loan Administrator and the Collateral Agent in connection with the
preparation of this Consent and Waiver and the transactions contemplated hereby,
including the reasonable fees, charges and disbursements of counsel for the
Board, the Loan Administrator and the Collateral Agent.
SECTION 8. Counterparts. This Consent and Waiver may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which together shall constitute a single instrument.
Delivery of an executed counterpart of a signature page of this Consent and
Waiver by facsimile transmission shall be as effective as delivery of a manually
executed counterpart hereof.
SECTION 9. Applicable Law. This Consent and Waiver shall be governed
by, and construed in accordance with, the law of the State of New York;
provided, that in the event the Board becomes a Lender pursuant to the Board
Guarantee, the rights and obligations of the Board hereunder shall be governed
by, and construed in accordance with, the Federal law of the United States of
America, if and to the extent such Federal law is applicable, and otherwise in
accordance with the law of the State of New York.
SECTION 10. Headings. The headings of this Consent and Waiver are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Waiver to be duly executed by their duly authorized officers, all as of the date
and year first above written.
ATA AIRLINES, INC.,
by /s/ David Wing
---------------------------------
Name: David M. Wing
Title: Executive Vice President & CFO
ATA HOLDINGS CORP.,
by David Wing
---------------------------------
Name: David M. Wing
Title: Executive Vice President & CFO
AIR TRANSPORTATION STABILIZATION BOARD
by /s/ Michael Kestenbaum
---------------------------------
Name: Michael Kestenbaum
Title: Executive Director