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AMENDMENT NUMBER THREE TO AMENDED AND RESTATED CREDIT AGREEMENT, WAIVER AND EXTENSION

Waiver Agreement

AMENDMENT NUMBER THREE TO AMENDED AND RESTATED CREDIT AGREEMENT, WAIVER AND EXTENSION | Document Parties: HAWAIIAN HOLDINGS INC | BANK OF HAWAII | BURDALE CAPITAL FINANCE, INC | HAWAIIAN AIRLINES, INC | HAWAIIAN HOLDINGS, INC | Rolls-Royce Deutschland Ltd  Co | WELLS FARGO CAPITAL FINANCE, INC You are currently viewing:
This Waiver Agreement involves

HAWAIIAN HOLDINGS INC | BANK OF HAWAII | BURDALE CAPITAL FINANCE, INC | HAWAIIAN AIRLINES, INC | HAWAIIAN HOLDINGS, INC | Rolls-Royce Deutschland Ltd Co | WELLS FARGO CAPITAL FINANCE, INC

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Title: AMENDMENT NUMBER THREE TO AMENDED AND RESTATED CREDIT AGREEMENT, WAIVER AND EXTENSION
Governing Law: New York     Date: 7/27/2011
Industry: Airline     Sector: Transportation

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Exhibit 10.4

 

AMENDMENT NUMBER THREE TO AMENDED
AND RESTATED CREDIT AGREEMENT, WAIVER AND EXTENSION

 

THIS AMENDMENT NUMBER THREE TO AMENDED AND RESTATED CREDIT AGREEMENT, WAIVER AND EXTENSION (this “ Amendment ”), dated as of June 28, 2011, is entered into by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each as a “ Lender ”, and, collectively, the “ Lenders ”), WELLS FARGO CAPITAL FINANCE, INC. , a California corporation, as agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “ Agent ”), HAWAIIAN HOLDINGS, INC. , a Delaware corporation (“ Parent ”), and HAWAIIAN AIRLINES, INC. , a Delaware corporation (“ Borrower ”), and in light of the following:

 

W I T N E S S E T H

 

WHEREAS , Parent, Borrower, Lenders, and Agent are parties to that certain Amended and Restated Credit Agreement, dated as of December 10, 2010 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Credit Agreement ”);

 

WHEREAS , Parent, Borrower, and Agent are parties to that certain Amended and Restated Security Agreement, dated as of December 10, 2010 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Security Agreement ”);

 

WHEREAS , Borrower and Agent are parties to that certain Amended and Restated Engine and Spare Parts Security Agreement, dated as of December 10, 2010 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Engine and Spare Parts Security Agreement ”);

 

WHEREAS , Borrower has informed Agent and the Lenders that it intends to prepay certain capital leases (the “ Designated Prepayments ”);

 

WHEREAS , Borrower has informed Agent and the Lenders that it intends to purchase an additional Engine manufactured by Rolls-Royce Deutschland Ltd & Co KG with manufacturer’s serial number 13452 and model number BR700-715-A1-30 (the “ Designated Engine ”);

 

WHEREAS , (a) pursuant to Section 6.7 of the Credit Agreement, Borrower is required to provide Agent with 15 days prior written notice of the Designated Prepayments (the “ Notice of Prepayment Requirement ”) only to the extent that such prepayments are not being made in connection with Refinancing Indebtedness permitted by Section 6.1 of the Credit Agreement, (b) pursuant to Section 4.6 of the Engine and Spare Parts Security Agreement, Borrower is required to provide Agent with at least 30 days prior notice before subjecting to the Security Interest (as such term is defined in the Engine and Spare Parts Security Agreement) and Lien of the Engine and Spare Parts Security Agreement the Designated Engine (the “ Notice of Designated Engine Requirement ”), and (c) pursuant to Section 4.6 of the Engine and Spare Parts Security Agreement and Section 6(n)(i)  of the Security Agreement, Borrower is required to execute and deliver to Agent the documents listed in such sections (the “ Designated Engine Deliverables ”) in respect of the Designated Engine by the time periods listed therein (the “ Designated Engine Deliverables Deadline ”);

 

WHEREAS , Borrower has requested that Agent and the undersigned Lenders (a) waive the Notice of Prepayment Requirement, (b) waive the Notice of Designated Engine Requirement, (c) consent to the extension of the Designated Engine Deliverables Deadline to the date that is 30 days after the date when Borrower acquires the Designated Engine, and (d) make certain other amendments to the Credit Agreement; and

 

WHEREAS , upon the terms and conditions set forth herein, Agent and the undersigned Lenders are willing to accommodate Borrower’s requests.

 

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NOW, THEREFORE , in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.             Defined Terms .  All initially capitalized terms used herein (including the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement (including Schedule 1.1 thereto), as amended hereby.

 

2.             Amendments to Credit Agreement .

 

(a)           Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending and restating, or adding (as applicable) the following definitions in the appropriate alphabetical order:

 

““ ACME ” means Airline Contract Maintenance and Equipment, Inc., a Delaware corporation.”

 

““ EBITDA ” means, with respect to any fiscal period, Parent’s and its Subsidiaries’ consolidated net earnings (or loss), minus extraordinary gains, interest income, net fair value decrease (or increase) in jet fuel Hedging Agreements that did not qualify as hedges as defined in the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 133, and, to the extent not reported or classified as depreciation or amortization expense, amortization of favorable maintenance contracts, accretion of unfavorable real estate leases, accretion of unfavorable aircraft leases, amortization of favorable aircraft leases, and accretion of unfavorable engine leases, plus, without duplication, non-cash extraordinary losses, non-cash Stock option expenses, interest expense, income taxes, depreciation and amortization, and charges resulting from the early termination of leases for Borrower’s lease of its fifteen (15) Boeing 717 Aircraft to the extent incurred during June of 2011 and in an aggregate amount not to exceed $70,000,000, in each case, for such period, as determined in accordance with GAAP.”

 

““ Permitted Fundamental Changes ” means (i) so long as no Default or Event of Default has occurred and is continuing or would result thereform, any merger or consolidation between or among Loan Parties, provided that (y) Borrower must be the surviving entity of any such merger or consolidation to which it is a party and (z) no merger or consolidation may occur between or among Parent and any other Loan Party, (ii) any merger or consolidation between or among Loan Parties (other than Parent) and Subsidiaries of Parent that are not Loan Parties so long as (y) a Loan Party is the surviving entity of any such merger or consolidation and (z) no Event of Default has occurred and is continuing or would result from such merger or consolidation, (iii) any merger or consolidation between or among Subsidiaries of Parent that are not Loan Parties, provided, that (y) if any involved Subsidiary is organized under the laws of the United States, any state thereof, or the District of Columbia, the survivor of such merger or consolidation must also be organized under the laws of the United States, any state thereof, or the District of Columbia) and (z) if the Stock (or any portion thereof) of any involved Subsidiary is subject to a Lien in favor of Agent, the Stock of the surviving Subsidiary of the merger or consolidation must be subject to a Lien in favor of Agent, (iv) the liquidation, winding up, or dissolution of a Subsidiary of Parent that is not a Loan Party (other than any such Subsidiary the Stock of which (or any portion thereof) is subject to a Lien in favor of Agent, unless the assets of such liquidating, winding up, or dissolving Subsidiary are transferred to (y) a Loan Party (other than Parent) or (z) another Subsidiary of Parent the Stock of which is subject to a Lien in favor of Agent (provided, that if the liquidating, winding up, or dissolving Subsidiary is organized under the laws of the United States, any state thereof, or the District of Columbia, the Subsidiary to which such assets are transferred must also be organized under the laws of the United States, any state thereof, or the District of Columbia)) so long as all of the assets of such liquidating, winding up, or dissolving Subsidiary are transferred to a Subsidiary of Parent that is not liquidating, winding up, or dissolving, or (v) so long as no Event of Default has occurred and is continuing or would result therefrom, transfers of assets between Borrower and ACME to the extent that Borrower has obtained each consent or waiver under any agreement to which Borrower is a party (other than the Loan Documents) that is required in order to permit such transfer or assignment thereunder; provided , however , that in no event shall the transfer of (I) any Aircraft, Engines, Spare Parts, or other assets as to which the perfection

 

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of a security interest therein would require the filing or recording of documents with the FAA and the International Registry, or (II) any Real Property, Copyrights (as such term is defined in the Security Agreement), Trademarks (as such term is defined in the Security Agreement), Patents (as such term is defined in the Security Agreement), Commercial Tort Claims, or other assets as to which the perfection of a Lien therein would require the filing or recording of documents with public offices other than public offices where Uniform Commercial Code financing statements are filed, unless, solely in the case of this clause (II), such Loan Party makes any filings required or reasonably requested by Agent under the Loan Documents to perfect Agent’s Lien in such assets, in the case of each of clauses (I) and (II), constitute a Permitted Fundamental Change.”

 

““ Specified Contracts ” means the maintenance and service contracts with respect to Aircraft, Engines, and Spare Parts owned, leased, or operated by Borrower to which Borrower is a party.”

 

““ Third Amendment ” means that certain Amendment Number Three to Amended and Restated Credit Agreement, dated as June 28, 2011, by and among Parent, Borrower, Agent and the Lenders.”

 

(b)           The definition of “ Permitted Disposition ” contained in Schedule 1.1 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of clause (u) of such section, (ii) replacing the period at the end of clause (v) of such section with “, and”, and (iii) adding the language below immediately after the end of clause (v) of such section:

 

“(w)        so long as no Event of Default has occurred and is continuing or would result therefrom, transfers of assets between Borrower and ACME to the extent that Borrower has obtained each consent or waiver under any agreement to which Borrower is a party (other than the Loan Documents) that is required in order to permit such transfer or assignment thereunder; provided , however , that in no event shall the transfer of (I) any Aircraft, Engines, Spare Parts, or other assets as to which the perfection of a security interest therein would require the filing or recording of documents with the FAA and the International Registry, or (II) any Real Property, Copyrights (as such term is defined in the Security Agreement), Trademarks (as such term is defined in the Security Agreement), Patents (as such term is defined in the Security Agreement), Commercial Tort Claims, or other assets as to which the perfection of a Lien therein would require the filing or recording of documents with public offices other than public offices where Uniform Commercial Code financing statements are filed, unless, solely in the case of this clause (II), such Loan Party makes any filings required or reasonably requested by Agent under the Loan Documents to perfect Agent’s Lien in such assets, in the case of each of clauses (I) and (II), constitute a Permitted Disposition.”

 

(c)           The definition of “ Permitted Indebtedness ” contained in Schedule 1.1 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of clause (s) of such section, (ii) replacing the period at the end of clause (t) of such section with “, and”, and (iii) adding the language below immediately after the end of clause (t) of such section:

 

“(u)         Indebtedness consisting of limited recourse guarantees by ACME with respect to Indebtedness of Borrower permitted pursuant to clause (c) of this definition of Permitted Indebtedness, so long as the recourse of the beneficiaries of such guarantees with respect thereto is limited to ACME’s right, title, and interest in the Specified Contracts assigned by Borrower to ACME, including the warranties and related rights associated with Aircraft and Engines that are the subject of the Indebtedness of Borrower that is guaranteed pursuant to the terms of such limited recourse guarantees.”

 

(d)           The definition of “ Permitted Intercompany Advances ” contained in Schedule 1.1 of the Credit Agreement is hereby amended by amended and restating such definition in its entirety as follows:

 

““Permitted Intercompany Advances” means unsecured loans or advances or capital contributions (a) from Parent or Borrower to any Subsidiary of Parent or any Subsidiary of Borrower that is a Loan Party, (b) from ACME to Borrower, (c) from any of Borrower’s Subsidiaries to Borrower, (d) from any

 

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Subsidiary of Borrower that is not a Loan Party to any other Subsidiary of Borrower, or (e) a Loan Party to a Subsidiary of Borrower that is not a Loan Party so long as (i) the amount of such loans or advances or capital contributions does not exceed $1,000,000 in any fiscal year, (ii) no Event of Default has occurred and is continuing or would result therefrom, and, (iii) for each of clauses (a), (b), (c), (d) or (e) above, any party that is owed money from a Loan Party in such transaction has executed an Intercompany Subordination Agreement.”

 

(e)           The definition of “ Permitted Liens ” contained in Schedule 1.1 of the Credit Agreement is hereby amended by (i) deleting the word “and” in clause (w) of such section, (ii) replacing the period at the end of clause (x) of such section with the language “, and”, and (iii) adding the language below immediately after the end of clause (x) of such section:

 

“(y)         Liens granted by ACME on ACME’s right, title, and interest in the Specified Contracts assigned by Borrower to ACME, including the warranties and related rights associated with Aircraft and Engines that are the subject of the Indebtedness of Borrower that is guaranteed pursuant to the terms of such Indebtedness permitted pursuant to clause (u) of the definition of Permitted Indebtedness, to the extent that such Liens secure the Indebtedness of ACME permitted pursuant to clause (u) of the definition of Permitted Indebtedness;”

 

(f)            Section 6.9 of the Credit Agreement is hereby amending by amending and restating such section in its entirety as follows:

 

“6.9         Distributions .        Other than Permitted Distributions, make any distribution or other payment on account of, or declare or pay any dividend (in cash or other property, other than Stock) on (or to the direct or indirect holders of Stock issued by Borrower or any other Subsidiary of Parent in their capacity as such), or purchase, acquire, redeem, or retire, any Stock issued by Borrower or any other Subsidiary of Parent, of any class, whether now or hereafter outstanding. For the avoidance of doubt, this Section 6.9 does not restrict Parent from making Permitted Redemptions or Permitted Conversions.”

 

(g)           Section 6.10 of the Credit Agreement is hereby amending by amending and restating such section in its entirety as follows:

 

“6.10       Accounting Methods .           Modify or change its fiscal year (other than as may be required to comply with GAAP and any other change so long as each of the Loan Parties maintains the same fiscal year) or its method of accounting (other than as may be required to conform to GAAP).”

 

(h)           Section 6.12 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of clause (e) of such section, (ii) replacing the period at the end of clause (f) of such section with “, and”, and (iii) adding the language below immediately after the end of clause (f) of such section:

 

“(g)         transactions among Borrower, ACME, or any of their respective Subsidiaries that are Loan Parties which are expressly permitted by Sections 6.1 , 6.2 , 6.3 , and 6.4 .”

 

3.             Waiver and Extension .  Anything in the Credit Agreement, the Security Agreement, and the Engine and Spare Parts Security Agreement to the contrary notwithstanding, and subject to the satisfaction or waiver of the conditions precedent set forth in Section 4 hereof, Agent and the undersigned Lenders hereby (a) waive the Notice of Prepayment Requirement so long as, with respect to the Designated Prepayments, Borrower has complied with each of the requirements of Section 6.7 of the Credit Agreement (other than the requirement that the written notice that Borrower provides to Agent be given 15 days prior to any such Designated Prepayments described in clause (b) of the definition of Permitted Prepayment, to the extent such prepayments are not being made in connection with Refinancing Indebtedness permitted by Section 6.1 of the Credit Agreement), (b) waive the Notice of Designated Engine Requirement, and (c) consent to the extension of the Designated Engine Deliverables Deadline to the date that is 30 days after the date when Borrower

 

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acquires the Designated Engine; provided , however , nothing herein, nor any communications among Parent, Borrower, any Guarantor, Agent, or any Lender, shall be deemed a waiver with respect to any Events of Default, or any future failure of Parent, Borrower or any Guarantor to comply fully with any provision of the Credit Agreement or any provision of any other Loan Document, and in no event shall this waiver be deemed to be a waiver of enforcement of any of Agent’s or Lenders’ rights or remedies under the Credit Agreement and the other Loan Documents, at law (including under the Code), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable pursuant to Section 9.1 of the Credit Agreement, with respect to any Defaults or Events of Default now existing or hereafter arising.  Except as expressly provided herein, Agent and each Lender hereby reserves and preserves all of its rights and remedies against Parent, Borrower and any Guarantor under the Credit Agreement and the other Loan Documents, at law (including under the Code), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable pursuant to Section 9.1 of the Credit Agreement.  The failure of Borrower to deliver to Agent the Designated Engine Deliverables within the applicable time frame set forth above shall constitute an immediate Event of Default.

 

4.             Conditions Precedent to Amendment . The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of the Amendment (the first date upon which all such conditions have been satisfied, the “ Amendment Effective Date ”):

 

(a)           Agent shall have received this Amendment, duly executed by the parties hereto, and the same shall be in full force and effect.

 

(b)           Agent shall have received the reaffirmation and consent of each Guarantor attached hereto as Exhibit A , duly executed and delivered by an authorized officer of each Guarantor.

 

(c)           Agent shall have received a certificate from the Secretary of ACME (i) attesting to the resolutions of ACME’s Board of Directors authorizing its execution, delivery and performance of the Loan Documents to which ACME is a party, (ii) authorizing specific officers of ACME to execute the same, (iii) attesting to the incumbency and signatures of such specific officers of ACME, (iv) certifying as to the Governing Documents, as amended, modified, or supplemented to the date of this Amendment of ACME, and attaching certified copies of such Governing Documents, (v) certifying as to a certificate of status with respect to ACME, dated within 10 days of the date of this Amendment, such certificate to be issued by the appropriate officer of the jurisdiction of organization of ACME, which certificate shall indicate that ACME is in good standing in such jurisdiction, and (vi) certifying as to certificates of status with respect to ACME, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of ACME) in which its failure


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