SIXTH AMENDMENT TO SENIOR SECURED REVOLVING CREDIT AGREEMENT
AND
LIMITED WAIVER
THIS SIXTH AMENDMENT TO SENIOR SECURED REVOLVING CREDIT AGREEMENT and
LIMITED WAIVER, dated as of February 18, 2003 (the "Amendment"), is by and among
MIDWEST EXPRESS HOLDINGS, INC. (the "Borrower"), the lenders party hereto and
U.S. BANK NATIONAL ASSOCIATION, as Agent (the "Agent").
RECITALS
WHEREAS, the Borrower is party to that certain Senior Secured Revolving
Credit Agreement, dated as of August 31, 2001, by and among the Borrower, the
lenders party thereto (each, a "Lender" and collectively, the "Lenders") and the
Agent, as amended by the First Amendment to Senior Secured Revolving Credit
Agreement dated as of January 9, 2002, the Second Amendment to Senior Secured
Revolving Credit Agreement dated as of June 28, 2002, the Third Amendment to
Senior Secured Revolving Credit Agreement dated as of August 29, 2002, the
Fourth Amendment to Senior Secured Revolving Credit Agreement dated as of
September 30, 2002, and the Fifth Amendment to Senior Secured Revolving Credit
Agreement dated as of October 7, 2002 (as so amended, the "Credit Agreement");
and
WHEREAS, Midwest Express Airlines, Inc.("Airlines") has entered into an
Equipment Purchase Agreement dated as of December 30, 2002, between Airlines and
TWA Airlines LLC ("TWA"), as amended by Addendum A to Exhibit A dated as of
January 20, 2003, between Airlines and American Airlines, Inc. ("AA") (as so
amended, the "Parts Purchase Agreement"), pursuant to which Airlines has
purchased the aircraft parts described in Exhibit A attached hereto
(collectively, the "Specified Parts Inventory"); and
WHEREAS, pursuant to the Parts Purchase Agreement, Airlines is obligated to
pay an aggregate purchase price for the Specified Parts Inventory of $2,663,411
in installments of $583,400 on December 30, 2002, $583,400 on January 31, 2003,
$616,600 on February 28, 2003, $583,400 on March 31, 2003 and $296,611 on April
30, 2003 (each an "Installment Payment" and collectively the "Installment
Payments"); and
WHEREAS, Airlines has paid the Installment Payments due on December 30,
2002, and January 31, 2003; and
WHEREAS, TWA and AA have assigned to Cirrus Aerospace, Inc. ("Cirrus")
their respective rights to receive all Installment Payments other than the
Installment Payment due on December 30, 2002, and to secure such payment
obligations Airlines has granted to Cirrus liens and security interests in the
Specified Parts Inventory; and
WHEREAS, to evidence its obligation to pay the Installment Payments due on
January 31, 2003, February 28, 2003, March 31, 2003 and April 30, 2003, Airlines
issued to Cirrus on December 30, 2002 its Secured Promissory Note in the
original principal amount of $616,600 and Airlines issued to Cirrus on January
20, 2003 its Secured Promissory Note in the original principal amount of
$1,463,411 (collectively, the "Cirrus Secured Notes"); and
WHEREAS, Defaults exist under Section 8(d)(ii) of the Credit Agreement by
reason of Airlines' incurrence of Indebtedness under the Parts Purchase
Agreement and the Cirrus Secured Notes in violation of Section 7.2 of the Credit
Agreement and the existence of Liens in the Specified Parts Inventory in favor
of Cirrus in violation of Section 7.1 of the Credit Agreement (the "Specified
Defaults"); and
WHEREAS, Events of Default also exist under Section 8(d)(i) of the Credit
Agreement by reason of the Borrower's failure to comply with Sections 6.11 and
6.12 of the Credit Agreement as of January 31, 2003 (the "Specified Events of
Default"); and
WHEREAS, the Borrower has requested that the Lenders and the Agent amend
the Credit Agreement and waive the Specified Defaults and the Specified Events
of Default as set forth herein; and
WHEREAS, to induce the Lenders and the Agent to enter into this Amendment
the Borrower has made certain material representations and promises to the
Lenders and the Agent as set forth herein; and
WHEREAS, the Lenders and the Agent are willing to enter into this Amendment
in reliance upon the material representations and promises made by the Borrower
to the Lenders and the Agent, but only under the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants, conditions and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
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DEFINITIONS AND INCORPORATION OF RECITALS
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1.1 Definitions. Capitalized terms used in this Amendment but not defined
herein shall have the definitions assigned in the Credit Agreement.
1.2 Recitals. Each of the Recitals set forth above is confirmed and adopted
by the parties hereto as if set forth herein.
ARTICLE II
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AMENDMENTS
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The Credit Agreement is amended as follows:
2.1 Section 1.1 - Definitions - Cirrus Secured Notes. The new definition
"Cirrus Secured Notes" is added to Section 1.1 of the Credit Agreement as
follows:
"Cirrus Secured Notes" means the Secured Promissory Note issued by Airlines
to Cirrus Aerospace, Inc. on December 30, 2002 in the original principal amount
of $616,600 and the
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Secured Promissory Note issued by Airlines to Cirrus Aerospace, Inc. on January
20, 2003 in the original principal amount of $1,463,411, each in the form
delivered to the Agent prior to February 18, 2003.
2.2 Section 1.1 - Definitions - Installment Payee. The new definition
"Installment Payee" is added to Section 1.1 of the Credit Agreement as follows:
"Installment Payee" means TWA Airlines LLC and American Airlines, Inc., as
sellers of the Specified Parts Inventory under the Parts Purchase Agreement,
Cirrus Aerospace, Inc., as assignee of the rights of TWA Airlines LLC and
American Airlines, Inc. to receive all Installment Payments other than the
Installment Payment due on December 30, 2002, and any subsequent assignee
thereof.
2.3 Section 1.1 - Definitions - Installment Payment. The new definition
"Installment Payment" is added to Section 1.1 of the Credit Agreement as
follows:
"Installment Payment" means each of the following payments due on the
following dates pursuant to the Parts Purchase Agreement and the Cirrus Secured
Notes: $583,400 due on December 30, 2002, $583,400 due on January 31, 2003,
$616,600 due on February 28, 2003, $583,400 due on March 31, 2003 and $296,611
due on April 30, 2003.
2.4 Section 1.1 - Definitions - Leverage Ratio. The definition of "Leverage
Ratio" contained in Section 1.1 of the Credit Agreement is amended in its
entirety to read as follows:
"Leverage Ratio" means, as of the last day of any month, the ratio of
Consolidated Funded Debt on such day to Consolidated EBITDAR for the 12 month
period ending as of such day; provided that for purposes of computing the
Leverage Ratio as of December 31, 2002 through and including April 31, 2003, the
outstanding unpaid amount of Installment Payments shall not be included in the
amount of Consolidated Funded Debt.
2.5 Section 1.1 - Definitions - Parts Purchase Agreement. The new
definition "Parts Purchase Agreement" is added to Section 1.1 of the Credit
Agreement as follows:
"Parts Purchase Agreement" means that certain Equipment Purchase Agreement
dated as of December 30, 2002, between Airlines and TWA Airlines LLC, as amended
by Addendum A to Exhibit A dated as of January 20, 2003, between Airlines and
American Airlines, Inc., pursuant to which Airlines has purchased the Specified
Parts Inventory, each in the form delivered to the Agent prior to February 18,
2003.
2.6 Section 1.1 - Definitions - Permitted Indebtedness. The definition of
"Permitted Indebtedness" in Section 1.1 of the Credit Agreement is amended by
inserting therein the following new subsection (xi) and renumbering former
subsection (xi) as new subsection (xii):
(xi) Indebtedness under the Parts Purchase Agreement and the Cirrus Secured
Notes, subject to compliance with Sections 6.17 and 6.18;
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2.7 Section 1.1 - Definitions - Permitted Liens. The definition of
"Permitted Liens" in Section 1.1 of the Credit Agreement is amended by inserting
therein the following new subsection (xiv):
(xiv) Liens securing Indebtedness under the Parts Purchase Agreement and
the Cirrus Secured Notes, subject to compliance with Sections 6.17 and 6.18.
2.8 Section 1.1 - Definitions - Specified Parts Inventory. The new
definition "Specified Parts Inventory" is added to Section 1.1 of the Credit
Agreement as follows:
"Specified Parts Inventory" means the aircraft parts described in Exhibit A
attached hereto.
2.9 Section 1.1 - Definitions - Revolving Committed Amount. The definition
of "Revolving Committed Amount" contained in Section 1.1 of the Credit Agreement
is amended in its entirety to read as follows:
"Revolving Committed Amount" means collectively, the aggregate amount of
all of the Revolving Commitments as referenced in Section 2.1(a) and,
individually, the amount of each Lender's Revolving Commitment as specified in
Schedule 2.1(a), subject to adjustment on account of assignment pursuant to the
provisions of Section 10.6(c) hereof, and subject to the automatic reductions of
the following amounts on the following dates: $2,500,000 on December 15, 2002,
$3,000,000 on February 15, 2003, $500,000 on March 15, 2003 and $500,000 on
April 15, 2003. Schedule 2.1(a) shall automatically be deemed to be amended to
reflect such reductions without any further action by the Borrower, the Agent or
the Lenders.
2.10 Section 6.17 - Release of Liens in Specified Parts Inventory. A new
Section 6.17 of the Credit Agreement is created to read as follows:
"6.17 Release of Liens in Specified Parts Inventory. The Borrower shall
cause Airlines to deliver to the Agent evidence satisfactory to the Agent that
the Specified Parts Inventory is free and clear of all Liens other than Liens in
favor of the Agent, including without limitation all Liens in favor of
Installment Payee, not later than the earlier of (i) the date that is 30
calendar days after all of the Installment Payments have been paid in full, or
(ii) May 31, 2003.
2.11 Section 6.18 - Grant of Liens in Specified Parts Inventory. A new
Section 6.18 of the Credit Agreement is created to read as follows:
"6.18 Grant of Liens in Specified Parts Inventory. The Borrower shall cause
Airlines to execute and deliver to the Agent, on the date when it is required to
make the delivery to the Agent specified in Section 6.17, such new or amended
security agreements, aircraft security agreements, UCC financing statements, FAA
lien registration statements, and other documents and materials as the Agent or
Required Lenders may request in order to provide to the Agent first priority
perfected Liens in the Specified Parts Inventory.
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ARTICLE III
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REPRESENTATIONS AND WARRANTIES
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The Borrower hereby represents and warrants to the Agent and the Lenders
that:
3.1 Credit Agreement. All of the representations and warranties made by the
Borrower in the Credit Agreement are true and correct as of the date hereof. No
Default or Event of Default under the Credit Agreement has occurred and is
continuing as of the date of this Amendment, except the Specified Defaults and
the Specified Events of Default.
3.2 Authorization; Enforceability. The making, execution and delivery of
this Amendment, and performance of and compliance with the terms of the Credit
Agreement, as amended, have been duly authorized by all necessary corporate
action by the Borrower. This Amendment is the valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its terms.
3.3 Absence of Conflicting Obligations. The making, execution and delivery
of this Amendment, and performance of and compliance with the terms of the
Credit Agreement, as amended, do not violate any presently existing provision of
law or the articles of incorporation or bylaws of the Borrower or any agreement
to which the Borrower is a party or by which it is bound.
3.4 Parts Purchase Agreement. The Borrower has heretofore furnished to the
Agent and the Lenders an accurate and complete copy of the Parts Purchase
Agreement, the Cirrus Secured Notes and each exhibit, schedule and other
document contemplated therein or executed by the Borrower or any Guarantor in
connection therewith.
ARTICLE IV
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MISCELLANEOUS
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4.1 Limited Waiver.
(a) The Required Lenders hereby waive the Specified Defaults and the
Specified Events of Default.
(b) This waiver is limited to the Specified Defaults and the Specified
Events of Default and shall not be construed to constitute (i) any waiver of any
other event, circumstance or condition or of any other right or remedy available
to the Agent or any Lender pursuant to the Credit Agreement or any other Credit
Document, (ii) a consent to any departure by the Borrower or any Subsidiary from
any other term or requirement of the Credit Agreement or any other Credit
Document, or (iii) any indication that the Required Lenders are prepared to
grant any further waiver of any provision of the Credit Agreement or any other
Credit Document.
4.2 Continuance of Credit Agreement. Except as specifically amended by this
Amendment, the Credit Agreement shall remain in full force and effect.
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4.3 Survival. All agreements, representations and warranties made in this
Amendment or in any documents delivered pursuant to this Amendment shall survive
the execution of this Amendment and the delivery of any such document.
4.4 Governing Law. This Amendment shall be governed by the laws of the
State of Wisconsin (without regard to choice of law principles).
4.5 Counterparts; Headings. This Amendment may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same agreement. Article and Section
headings in this Amendment are inserted for convenience of reference only and
shall not constitute a part hereof.
4.6 Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Amendment or affecting the validity or
enforceability of such provision in any other jurisdiction.
4.7 Conditions to Effectiveness. This Amendment shall become effective as
of the date hereof upon the satisfaction of each the following conditions
precedent:
(a) The Agent shall have received a fully-executed copy of this Amendment,
executed by each of the Borrower, the Lenders and the Agent;
(b) The Agent shall have received a fully-executed copy of a Reaffirmation
of Guaranty in the form attached hereto, executed by each of the Guarantors; and
(c) No Default or Event of Default shall have occurred and be continuing,
except the Specified Defaults and the Specified Events of Default.
4.8 Costs and Expenses. Without limiting any provisions of the Credit
Agreement or any of the prior Amendments thereto relating to the payment of fees
and expenses by Borrower, Borrower shall pay promptly all costs and expenses of
the Agent incurred in connection with this Amendment, including fees and
expenses of the Agent's legal counsel.
4.9 Ratification. The Credit Agreement, as amended hereby, the other Credit
Documents and all other documents, instruments and agreements related thereto,
are hereby ratified and confirmed in all respects and shall continue in full
force and effect. The Credit Agreement shall, together with this Amendment, be
read and construed as a single agreement. All references in the Credit
Agreement, the other Credit Documents and any related agreement or instrument
shall hereafter refer to the Credit Agreement as amended hereby.
4.10 No Other Amendments. Except as expressly provided in this Amendment,
all of the terms and conditions of the Credit Agreement and the other Credit
Documents remain in full force and effect. Nothing contained in this Amendment
shall be construed to imply a willingness on the part of the Lenders or the
Agent to grant any similar or other future waivers or amendments of any of the
terms and conditions of the Credit Agreement or the other Credit Documents.
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4.11 Release. In order to induce the Agent and the Lenders to enter into
this Amendment, the Borrower and the Guarantors acknowledge and agree that: (a)
they do not have any claim or cause of action against the Agent or any of the
Lenders (or any of their respective directors, officers, employees or agents);
(b) they do not have any offset right, counterclaim or defense of any kind
against any of its obligations, indebtedness or liabilities to the Agent and the
Lenders; and (c) each of the Agent and the Lenders have heretofore properly
performed and satisfied in a timely manner all of their obligations to the
Borrower and the Guarantors. The Borrower and the Guarantors wish to eliminate
any possibility that any past conditions, acts, omissions, events, circumstances
or matters would impair or otherwise adversely affect any of the Agent's or the
Lenders' rights, interests, contracts, collateral security or remedies.
Therefore, the Borrower and the Guarantors unconditionally release, waive and
forever discharge (i) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of either of the Agent or any of the Lenders to the
Borrower or any Guarantor, except the obligations to be performed by the Agent
and the Lenders as expressly stated in the Credit Agreement, as amended hereby,
and the other Credit Documents, and (ii) all claims, offsets, causes of action,
suits or defenses of any kind whatsoever (if any), whether arising at law or in
equity, whether known or unknown, which the Borrower or any Guarantor might
otherwise have against the Agent or any of the Lenders or any of their
directors, officers, employees or agents, in either case (i) or (ii) on account
of any condition, act, omission, event, contract, liability, obligation,
indebtedness, claim, cause of action, defense, circumstance or matter of any
kind whatsoever arising or occurring on or prior to the date of this Amendment.
Except as prohibited by law, the Borrower and the Guarantors hereby waive any
right they may have to claim or recover in any litigation involving the Agent or
any of the Lenders, any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Borrower and the
Guarantors (A) certify that no representative, agent or attorney of any Lender
or the Agent has represented, expressly or otherwise, that such Lender or the
Agent would not, in the event of litigation, seek to enforce the foregoing
waivers, releases and discharges, and (B) acknowledge that the Agent and the
Lenders have been induced to enter into this Amendment by, among other things,
the waivers, releases, discharges and certifications contained herein. The
waivers, releases and discharges in this paragraph shall be effective regardless
of any other event that may occur or not occur on or after the date hereof.
[signature page follows]
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REAFFIRMATION OF GUARANTY
Each of the undersigned (each a "Guarantor") executed a Subsidiary Guaranty
(each a "Guaranty") dated as of August 31, 2001 in favor of the Lenders (as
defined in each Guaranty) pursuant to which each Guarantor guaranteed certain
obligations owed by Midwest Express Holdings, Inc. (the "Borrower") to the
Lenders, including, without limitation, all debts, liabilities, obligations,
covenants and agreements of the Borrower in that certain Senior Secured
Revolving Credit Agreement, dated as of August 31, 2001 (as amended from time to
time, the "Credit Agreement"), by and between the Borrower, the Lenders and U.S.
Bank National Association, as Agent for the Lenders, and related agreements, as
amended. Each Guarantor acknowledges and consents to the Sixth Amendment to
Senior Secured Revolving Credit Agreement and Limited Waiver of even date
herewith (the "Amendment") and hereby agrees that it shall remain liable under
its Guaranty for all amounts owed pursuant to the Credit Agreement, as amended
by the Amendment, and the related agreements. Further, each Guarantor expressly
agrees that it shall be irrevocably bound by the provisions of the Release set
forth in Section 4.11 of the Amendment.
Dated as of February 18, 2003.
MIDWEST EXPRESS AIRLINES, INC.
By: /s/ Authorized Signature
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Title:
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ASTRAL AVIATION, INC.
By: /s/ Authorized Signature
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Title:
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MIDWEST EXPRESS SERVICES - OMAHA, INC.
By: /s/ Authorized Signature
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Title:
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MIDWEST EXPRESS SERVICES - KANSAS CITY, INC.
By: /s/ Authorized Signature
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Title:
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YX PROPERTIES, LLC
By: /s/ Authorized Signature
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Title:
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first written above.
MIDWEST EXPRESS HOLDINGS, INC.
By: /s/ Authorized Signature
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Title:
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U.S. BANK NATIONAL ASSOCIATION, in its
capacity as Agent and as a Lender
By: /s/ Authorized Signature
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Title:
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M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ BANK
By: /s/ Authorized Signature
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Title:
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Attest:
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Title:
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BANK ONE, NA (Main Office Chicago)
By: /s/ Authorized Signature
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Title:
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