September 30, 2005 10-Q Exhibit 10.1


    SEVENTH
      AMENDMENT TO CREDIT AGREEMENT

     

    This
      SEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Seventh
      Amendment”),
      dated
      as of July 31, 2005, is by and among ATA AIRLINES INC., an Indiana corporation
      (the “Borrower”),
      ATA
      HOLDINGS CORP. (the “Parent”),
      each
      of the Subsidiaries of the Parent identified on the signature pages hereto
      (the
“Subsidiaries”),
      and
      SOUTHWEST AIRLINES CO., a Texas corporation (the “Lender”).

     

    R
      E C
      I T A L S

     

    A. The
      Lender and the Borrower, the Parent and the Subsidiaries entered into that
      certain Secured Debtor-in-Possession Credit and Security Agreement dated as
      of
      December 22, 2004, as amended by that certain First Amendment to Credit
      Agreement dated as of January 30, 2005, that certain Second Amendment to Credit
      Agreement dated as of February 25, 2005, that certain Third Amendment to Credit
      Agreement dated as of March 31, 2005, that certain Fourth Amendment to Credit
      Agreement dated as of April 30, 2005, that certain Fifth Amendment to Credit
      Agreement dated as of May 30, 2005, and that certain Sixth Amendment to Credit
      Agreement dated as of June 30, 2005 (the “Credit
      Agreement”),
      pursuant and subject to the terms and conditions of which, among other things,
      the Lender agreed to make loans and other financial accommodations to the Loan
      Parties (as defined in the Credit Agreement).

     

    B. The
      Borrower has requested that the Lender agree to amend certain provisions of
      the
      Credit Agreement on terms and conditions set forth herein.

     

    C. Subject
      to the terms and conditions of this Seventh Amendment, the Lender is willing
      to
      agree to the request of the Borrower.

     

    A
      G R
      E E M E N T S

     

    NOW,
      THEREFORE, in consideration of the mutual agreements contained herein, and
      subject to the terms and conditions hereof, the parties hereto hereby agree
      as
      follows:

     

    1. Incorporation
      of Recitals.
      The
      Recitals set forth above are incorporated herein, are acknowledged by the
      Borrower to be true and correct and are made a part hereof.

     

    2. Definitions.
      All
      capitalized terms used but not elsewhere defined herein shall have the
      respective meanings ascribed to such terms in the Credit Agreement.

     

    3. Amendments
      to Credit Agreement.
      The
      Credit Agreement is amended as set forth below:

     

    (a) Section
      7.11(a) - Minimum Consolidated EBITDARR.
      The
      Credit Agreement is amended by deleting the current version of Section 7.11(a)
      in its entirety and substituting the following in lieu thereof: 

     

    “(a) Minimum
      Consolidated EBITDARR. (i) Permit Consolidated EBITDARR for each calendar month
      beginning on September 1, 2005 and ending with November 30, 2005 to be less
      than
      75% of the projected EBITDARR for each such month as set forth the in the
      Confidential Information Memorandum dated August 8, 2005 with respect to
      Borrower; nor (ii) permit cumulative Consolidated EBITDARR for each month
      beginning on September 1, 2005 and ending on November 30, 2005 to be less than
      80% of the cumulative Consolidated EBITDARR for each such calendar month as
      set
      forth in the Confidential Information Memorandum dated August 8, 2005 with
      respect to Borrower (provided that the first such cumulative EBITDARR of the
      Borrower, the Parent and its Subsidiaries shall be tested for the period
      beginning on September 1, 2005 and ending on October 31, 2005).”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Section
      7.11(b) - Minimum Adjusted EBITDARR.
      The
      Credit Agreement is amended by deleting the current version of Section 7.11(b)
      in its entirety and substituting the following in lieu thereof: 

     

    “(b) Minimum
      Adjusted EBITDARR. (i) Permit Adjusted EBITDARR for each month beginning on
      September 1, 2005 and ending with November 30, 2005 to be less than 75% of
      the
      projected Adjusted EBITDARR for each such month as derived from the Confidential
      Information Memorandum dated August 8, 2005 with respect to Borrower; nor (ii)
      permit cumulative Adjusted EBITDARR for each month beginning on September 1,
      2005 and ending on November 30, 2005 to be less than 80% of the cumulative
      Adjusted EBITDARR for each such month as set forth in the Confidential
      Information Memorandum dated August 8, 2005 with respect to Borrower (provided
      that the first such cumulative Adjusted EBITDARR of the Borrower, the Parent
      and
      its Subsidiaries shall be tested for the period beginning on September 1, 2005
      and ending on November 30, 2005).”

     

    (c) Section
      7.11(c) - Liquidity.
      The
      Credit Agreement is amended by deleting the current version of Section 7.11(c)
      in its entirety and substituting the following in lieu thereof.

     

    "(c)
       Liquidity.
      (i) Permit Liquidity on any day during the calendar months beginning on January
      1, 2005 through July 30, 2005 to be less than 75% of the projected Liquidity
      for
      each such calendar month as set forth in the Borrower's Projections nor (ii)
      permit Liquidity on any day during the calendar months beginning on August
      1,
      2005 through December 31, 2005 to be less than 80% of the projected Liquidity
      for each such calendar month or Liquidity as of the last day of any such
      calendar month to be less than 90% of the projected Liquidity for such calendar
      month as set forth in the Confidential Information Memorandum dated August
      8,
      2005 with respect to Parent and its Subsidiaries, including Borrower, on a
      consolidated basis.

     

    (d) Section
      7.01(q).
      The
      Credit Agreement is amended by correcting a typographical error in Section
      7.01(q) of the Credit Agreement as follows: the reference in Section 7.01(q)
      to
      Section 7.03(c)(xi) is amended to be a reference to Section
      7.03(c)(x).

     

    4. Conditions
      to Effectiveness.
      The
      effectiveness of this Seventh Amendment shall be subject to the satisfaction
      of
      all of the following conditions in a manner, form and substance satisfactory
      to
      the Lender:

     

    (a) Delivery
      of Documents.
      The
      following shall have been delivered to the Lender, each duly authorized and
      executed and each in form and substance satisfactory to the Lender:

     

    (1) this
      Seventh Amendment; and

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (2) such
      other instruments, documents, certificates, consents, waivers and opinions
      as
      the Lender may reasonably request.

     

    (b) No
      Default.
      No
      Event of Default or event which, with the giving of notice or the lapse of
      time,
      or both, would constitute an Event of Default, shall exist as
      of the
      effective date of this Seventh Amendment, after giving effect to this Seventh
      Amendment.

     

    (c) Approval
      of the ATSB and the Creditors Committee.
      The
      Lender shall have received satisfactory evidence that the ATSB and the Creditors
      Committee shall have consented to this Seventh Amendment in accordance with
      the
      provisions of Section 11.01 of the Credit Agreement.

     

    Upon
      the
      satisfaction of all of the conditions set forth in this Paragraph 4 this
      Amendment shall become effective as of July 31, 2005 (the “Effective
      Date.”)

     

    5. References.
      From
      and after the Effective Date, all terms used in the Credit Documents which
      are
      defined in the Credit Agreement shall be deemed to refer to such terms as
      amended by this Seventh Amendment. This Seventh Amendment shall constitute
      a
“Loan
      Document.”

     

    6. Representations
      and Warranties.
      Each
      Loan Party hereby confirms to the Lender that the representations and warranties
      set forth in the Loan Documents are true and correct in all respects as of
      the
      date hereof, and shall be deemed to be remade as of the date hereof. Each Loan
      Party represents and warrants to the Lender that (i) such Loan Party has full
      power and authority to execute and deliver this Seventh Amendment and to perform
      its obligations hereunder, (ii) upon the execution and delivery hereof, this
      Seventh Amendment will be valid, binding and enforceable upon such Loan Party
      in
      accordance with its terms, (iii) the execution and delivery of this Seventh
      Amendment does not and will not contravene, conflict with, violate or constitute
      a default under (A) its organizational documents or (B) any applicable law,
      rule, regulation, judgment, decree or order or any agreement, indenture or
      instrument to which such Loan Party is a party or is bound or which is binding
      upon or applicable to all or any portion of such Loan Party’s properties or
      assets and (iv) as of the date hereof no Event of Default exists.

     

    7. No
      Further Amendments; Ratification of Liability.
      Except
      as amended hereby, the Credit Agreement and each of the other Loan Documents
      shall remain in full force and effect in accordance with its respective terms.
      Each Loan Party hereby ratifies and confirms its liabilities, obligations and
      agreements under the Credit Agreement and the other Loan Documents, all as
      amended by this Seventh Amendment, and the Liens created thereby, and
      acknowledges that (i) it has no defenses, claims or set-offs to the enforcement
      by the Lender of such liabilities, obligations and agreements, (ii) the Lender
      has fully performed all obligations to the Loan Parties which it may have had,
      or has, on and as of the date hereof and (iii) other than as specifically set
      forth herein, the Lender does not waive, diminish or limit any term or condition
      contained in the Credit Agreement or the other Loan Documents. The agreement
      of
      the Lender to the terms of this Seventh Amendment or any other amendment of
      the
      Credit Agreement shall not be deemed to establish or create a custom or course
      of dealing among the Lender and the Loan Parties.

     

    8. Incorporation
      by Reference.
      The
      following sections of the Credit Agreement are incorporated by reference in
      this
      Seventh Amendment: 1.02 (Other Interpretive Provisions); 11.02(b) (Effectiveness
      of Facsimile Documents and Signatures); 11.11 (Counterparts); 11.12
      (Integration); 11.14 (Severability); and 11.15 (Governing Law).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    9. Further
      Assurances.
      Each
      Loan Party will at any time and from time to time do, execute, acknowledge
      and
      deliver, or will cause to be done, executed, acknowledged and delivered, all
      such further acts, documents and instruments as reasonably may be required
      by
      the Lender in order to effectuate fully the intent of this Seventh
      Amendment.

     

    [signatures
      on following pages]

     

    


     


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, this Seventh Amendment has been executed and delivered by
      each
      of the parties hereto by a duly authorized officer of each such party on the
      date first set forth above.

     

    
      	
              LENDER:

               

              SOUTHWEST
                AIRLINES CO., a Texas corporation

               

            
	
              By: /s/
                Laura Wright 

            
	
              Name:
                 Laura
                Wright   

            
	
              Title: SVP
                Finance and CFO  

            
	
              BORROWER:

               

              ATA
                AIRLINES, INC., an Indiana corporation

               

            
	
              By: /s/
                Sean G.Frick 

            
	
              Name:
                 Sean
                G. Frick    

            
	
              Title: Vice
                President & Chief Restructuring Officer 

            
	
              GUARANTORS:

               

              ATA
                HOLDINGS CORP., an Indiana corporation

               

            
	
              By: /s/
                Sean G.Frick 

            
	
              Name:
                 Sean
                G. Frick    

            
	
              Title: Vice
                President & Chief Restructuring Officer 

            
	
               

            
	
              AMBASSADAIR
                TRAVEL CLUB, INC., an Indiana corporation

               

            
	
              By: /s/
                Sean G.Frick 

            
	
              Name:
                 Sean
                G. Frick    

            
	
              Title: Vice
                President & Chief Restructuring Officer 

            
	
               

            
	
              ATA
                LEISURE CORP., an Indiana corporation

               

            
	
              By: /s/
                Sean G.Frick 

            
	
              Name:
                 Sean
                G. Frick    

            
	
              Title: Vice
                President & Chief Restructuring Officer 

            
	
               

            
	
              AMBER
                TRAVEL, INC., an Indiana corporation

               

            
	
              By: /s/
                Sean G.Frick 

            
	
              Name:
                 Sean
                G. Frick    

            
	
              Title: Vice
                President & Chief Restructuring Officer 

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	
              AMERICAN
                TRANS AIR EXECUJET, INC., an Indiana corporation

               

            
	
              By: /s/
                Sean G.Frick 

            
	
              Name:
                 Sean
                G. Frick    

            
	
              Title: Vice
                President & Chief Restructuring Officer

            
	
               

            
	
              ATA
                CARGO, INC., a California corporation

               

            
	
              By: /s/
                Sean G.Frick 

            
	
              Name:
                 Sean
                G. Frick    

            
	
              Title: Vice
                President & Chief Restructuring Officer

            
	
               

            
	
              CHICAGO
                EXPRESS AIRLINES, INC., a Georgia corporation

               

            
	
              By: /s/
                Brian T. Hunt

            
	
              Name:  Brian
                T. Hunt

            
	
              Title:  Senior
                Vice President & General
                Council

            


    

    [signature
      page to Seventh Amendment to Credit Agreement]