Finova Capital Corporation-Fourth
Amendment to Consolidated Aircraft
and Engine Loan and Security
Agreement, Dated January 17, 0000
XXXXXX XXXXXXXXX TO
CONSOLIDATED, AMENDED AND RESTATED
AIRCRAFT AND ENGINE LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO CONSOLIDATED, AMENDED AND RESTATED AIRCRAFT AND
ENGINE LOAN AND SECURITY AGREEMENT (this "Amendment") made and entered into this
16th day of January, 1997 by and between FINOVA CAPITAL CORPORATION (formerly
GREYHOUND FINANCIAL CORPORATION) (the "Lender") , a corporation organized and
existing under the laws of the State of Delaware, with its chief executive
office and principal place of business at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000 and TOWER AIR, INC. (the "Borrower"), a corporation organized and
existing under the laws of the State of Delaware, with its chief executive
office and principal place of business at Xxxxxx Xx. 00, Xxxx X. Xxxxxxx
Xxxxxxxxxxxxx Xxxxxxx, Xxxxxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
--------------------
WHEREAS, the Borrower and the Lender have previously entered into the
Consolidated, Amended and Restated Aircraft and Engine Loan and Security
Agreement dated as of March 25, 1996, as amended by the First Amendment to
Consolidated, Amended and Restated Aircraft and Engine Loan and Security
Agreement dated as of May 8, 1996, the Second Amendment to Consolidated, Amended
and Restated Aircraft and Engine Loan and Security Agreement dated as of
September 25, 1996 and the Third Amendment to Engine Loan and Security Agreement
dated as of November 27, 1996 (collectively, the "Loan Agreement");
WHEREAS, the Borrower requests that the Lender make an additional loan to
the Borrower in the amount of $2,000,000.00;
NOW THEREFORE, the undersigned hereto agree as follows:
1. DEFINITIONS.
------------
Capitalized terms used herein unless otherwise defined herein shall have
the meaning ascribed to such terms in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT.
-----------------------------
2.1 Section 1.1 of the Loan Agreement is amended by deleting the
definition "Engine ["62962"] and inserting in place thereof the following:
"Engine [66292]: collectively, one (1) Xxxxx & Whitney Model
JT9D-7A engine bearing Manufacturer's Serial No. P662962N and one (1)
Xxxxx Xxxxxxx Model JT9D-7A Engine bearing manufacturer's serial number
P662864 together with any and all attachments, accessories,
improvements and betterments thereto and replacements thereof and all
general intangibles and contract rights, including, but not limited to,
all rights, issues, proceeds, insurance proceeds, properties, revenues
and other income in respect of such engines."
2.2 Section 1.1 of the Loan Agreement is amended by deleting the
definitions "November 1996 Note" and "November 1996 Loan" and inserting the
following in place thereof:
"November 1996 Note: that certain Promissory Note dated November
27, 1996 issued by the Borrower to the Lender in the principal amount
of $2,000,000.00 as amended and restated by that certain Amended and
Restated Promissory Note dated January 15, 1997 issued by the Borrower
to the Lender in the principal amount of $4,000,000.00, as at any time
amended, supplemented or restated."
"November 1996 Loan: collectively USD2,000,000.00, which was
advanced by the Lender to the Borrower on November 27, 1996 and US
2,000,000.00 which was advanced by the Lender to the Borrower on
January 15, 1997, and any other amounts advanced by the Lender to the
Borrower at any other time."
2.3 Section 1.1 of the Loan agreement is amended by deleting the
definition of "Second Funding Date" and inserting the following in place
thereof:
"Second Funding Date: the date or dates to be agreed upon by the
Borrower and the Lender upon which the November 1996 Loan shall be
advanced by the Lender to the Borrower."
-2-
2.4 Clause (c) of Section 3.4 is deleted in its entirety and replaced
by the following:
"(c) The unpaid principal amount of that portion of the Loan
equal to the November 1996 Loan together with any unpaid accrued
interest thereon shall be repaid by the Borrower in full on December
16, 1997 and the unpaid principal amount of that portion of the Loan
equal to the November 1996 Loan together with any unpaid accrued
interest thereon and all other amounts owing hereunder shall be repaid
by the Borrower in full on December 26, 2001."
2.5 New subparagraph (f) and (g) are inserted at the end of Section
6.9 which reads as follows:
"(f) Notwithstanding paragraph (e) of this Section 6.9, on the
first day of each month the Borrower shall deliver to Lender each of
the following:
(i) the Aircraft/Engine Status and Maintenance Summary
Reports in the form of Exhibit "A" for each of the Aircraft
and the Spare Engines;
(ii) a budget for such month along with a cash flow
statement for the prior month; and
(iii) a status update for the Upgrade Engines, stating,
among other things, the estimated time for the completion
of the modifications to each of the Upgrade Engines."
"(g) During each calendar quarter, the Lender shall be permitted
to inspect the financial records of the Borrower and the logs and
records of the Borrower relating to the Aircraft and Engines and to
perform a physical inspection of the Aircraft and the Engines. All
inspections conducted by the Lender shall be at the sole cost and
expense of the Borrower."
2.6 A new Exhibit "A" in the form of Exhibit "A' attached hereto is
appended to the end of the Loan Agreement.
-3-
3. REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower restates the representations and warranties set forth in
Section 7 of the Loan Agreement as if such representations and warranties were
set forth in full herein, provided, however that every reference in such
representations and warranties to the term "Documents" shall be deemed to
include this Amendment and the November 1996 Promissory Note (collectively, the
"Loan Document Amendments").
4. CONDITIONS PRECEDENT
--------------------
4.1 Notwithstanding anything contained in this Amendment or the
other Loan Document Amendments to the contrary, the obligation of the Lender to
advance that the additional $2,000,000.00 of the November 1996 Loan or any part
thereof is expressly contingent on the fulfillment and/or satisfaction in the
sole discretion of the Lender of the following conditions precedent and the
receipt by the Lender (in form and substance satisfactory to the Lender) of such
documents and instruments, if any, therein required or deemed necessary by the
Lender to evidence the fulfillment and/or satisfaction of said conditions
precedent:
(a) The Borrower and the Lender have executed and delivered
this Amendment or have caused the same to be done;
(b) The Borrower has executed and delivered to the Lender the
Amended and Restated Promissory Note dated January 15, 1997 in the principal
amount of $4,000,000.00 (the "New Note");
(c) The Lender has received a Certificate of Resolutions,
certified by the corporate secretary of the Borrower and setting forth a true,
complete and accurate copy of the resolutions approved by the Board of
Directors, of the Borrower authorizing the entering into, execution and delivery
of this Amendment and the New Note by the Borrower thereunder;
(d) The Lender has received an Opinion of Counsel for the
Borrower's counsel in form and substance acceptable to the Lender;
(e) The Lender has received an Officer's Certificate setting
forth the following: (i) the name of each of the duly elected and acting
officers of the Borrower together with the title of each office each holds; (ii)
the name and title of each officer of the Borrower who is authorized by the
Board of Directors of the Borrower to
-4-
enter into, execute and deliver the Documents on behalf of the Borrower and a
specimen signature of each of said officers and (iii) a certified copy of a
current Certificate of Good Standing of the Borrower certified by the Secretary
of State of the State of Delaware;
(f) The Lender has received a copy of the Borrower's articles
of incorporation;
(g) The Lender has received a copy of the by-laws, as amended,
of the Borrower;
(h) The Borrower shall have paid to the Lender the Loan Fee
(defined below); and
(i) Such other agreements, certificates instruments or legal
opinions in writing as shall be deemed by the Lender or its counsel necessary or
desirable in order to more fully and completely service, protect, perfect or
preserve the Lender's Security Interests and other interests in and to the
Aircraft, and otherwise under the Documents and the Mortgage.
5. ACKNOWLEDGMENTS AND CONFIRMATIONS
---------------------------------
5.1 All references in the Loan Agreement and every other agreement,
instrument and document executed and delivered by Borrower in connection
therewith, to the "Loan Agreement" shall be deemed to refer to the Loan
Agreement as amended hereby.
5.2. The Loan Agreement and all agreements, instruments and documents
executed and delivered in connection with any of the foregoing, shall each be
deemed amended hereby to the extent necessary, if any, to give effect to the
provisions of this Amendment.
6. MISCELLANEOUS
-------------
6.1 The Borrower will upon receipt of invoices by Lender or upon
Lender's demand, pay to or reimburse Lender for all reasonable out-of-pocket
expenses of Lender incurred in connection with the negotiation, execution and
delivery of this Amendment and each of the other Loan Document Amendments
contemplated hereby, including, without limitation, all reasonable legal fees
and disbursements of Lender's
-5-
counsel incurred in connection with all professional services rendered and
disbursements incurred by said lawyers with respect thereto.
6.2 The Borrower shall pay to Lender on or before January 15, 1997 a
loan fee equal to $20,000.00 (the "Loan Fee").
6.3 Except as specifically amended hereby, the Loan Agreement shall
remain in full force and effect in accordance with its terms, and each of the
Borrower and Lender hereby ratify and affirm all of the terms and conditions of
the Loan Agreement as amended hereby.
6.4 THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ARIZONA.
6.5 This Amendment shall be binding upon and inure to the benefit of
the Borrower and the Lender and their respective successors and assigns. The
rights and obligations of the Borrower under this amendment shall not be
assigned or delegated without the prior written consent of Lender, and any
purported assignment or delegation without such consent shall be void.
6.6 Time is of the essence with respect to the terms and provisions of
this Amendment.
6.7 This Amendment may be executed in any number of counter parts, and
each of such counterpart shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same Amendment.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment
to Consolidated, Amended and Restated Aircraft and Engine Loan and Security
Agreement as of the day and year first above written.
TOWER AIR, INC.
By
------------------------------
Title
Tax ID No.: 00-000-0000
FINOVA CAPITAL CORPORATION
By
------------------------------
Title
-7-
AMENDED AND RESTATED
PROMISSORY NOTE
---------------
USD 4,000,000.00 January 15, 1997
FOR VALUE RECEIVED, TOWER AIR, INC. (the "Maker"), a Delaware corporation,
having its principal place of business and chief executive office at Hangar Xx.
0, Xxxx X. Xxxxxxx Xxxxxxxxxxxxx Xxxxxxx, Xxxxxxx, Xxx Xxxx 00000, does hereby
unconditionally promise to pay to FINOVA CAPITAL CORPORATION (the "Holder") or
its order, at the Holder's principal place of business at 0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or at such other place as the Holder may from
time to time in writing direct, the principal sum of USD 4,000,000.00 (the
"Loan"), in consecutive monthly installments consisting, in some cases, of
interest only and, in other cases, of principal and interest (an "Installment"),
on the days and in the amounts set forth on Schedule I attached hereto and made
a part hereof; provided, however, that the last such Installment shall be in the
-------- -------
amount necessary to pay all amounts due and owing to the Holder under the Loan
Agreement. Each date on which an Installment is due is hereinafter referred to
as a "Due Date." Interest shall accrue on any and all principal amounts
remaining unpaid hereunder from time to time outstanding from the date hereof
until such principal amounts are paid in full, at a fixed rate per annum of
10.27% computed from the date hereof. If any Due Date shall fall on a date which
is not a Business Day, the amount due on such date shall be paid on the
immediately succeeding Business Day.
Capitalized terms used herein and not otherwise defined shall have the same
meaning as is ascribed to such terms in that certain Consolidated, Amended and
Restated Aircraft and Engine Loan and Security Agreement dated March 25, 1996,
as at any time amended (the "Loan Agreement"), between the Maker, as borrower
therein, and the Holder, as lender therein.
This Amended and Restated Promissory Note (the "Note"): (i) amends and
restates the Promissory Note dated November 27, 1996 in the principal amount of
$2,000,000.00 which was issued by the Maker to the Holder and (ii) is made
pursuant and subject to the terms and conditions of the Loan Agreement,
providing, among other things, for the acceleration of the maturity hereof upon
the happening of certain stated events and for the prepayment of the Loan by the
Maker. This Note is secured, among other things, by a lien and security
interest granted to the Holder in the Aircraft and the Engines by the Loan
Agreement and the Mortgage, to which reference is made for a
description of the Aircraft and the Engines and the rights of the parties with
respect thereto.
If any amount or portion thereof payable hereunder is not paid when due,
the Maker shall pay interest thereon at the Overdue Rate from the Due Date
thereof to and including the earlier to occur of (i) the date(s) of payment in
full of such overdue amount or portion thereof or (ii) the date the Unpaid
Amount is declared due and payable.
Interest calculations under this Note shall be made on a 360 day year based
on the actual number of days elapsed.
In the event (i) the Maker fails to pay any amount when due hereunder and
such failure continues for five (5) days after receipt by the Maker of written
notice thereof, or (ii) an Event of Default occurs under the Loan Agreement or
the other Documents, then, upon such occurrence, the Holder may, at the Holder's
option, declare this Note immediately due and payable; whereupon, this Note
shall be due and payable and the Maker shall immediately pay to the Holder the
Unpaid Amount plus all costs and expenses, including, but not limited to,
reasonable attorneys' fees, suffered or incurred in connection with the
enforcement of this Note.
Amounts due hereunder shall be paid (i) without set-off, counterclaim,
recoupment, abatement, demand, deduction, defense or any other circumstance of
whatsoever kind and (ii) free and clear of and without deduction for any present
or future taxes, restrictions or conditions of whatsoever kind.
Notwithstanding any provisions to the contrary herein contained, the Holder
shall not collect a rate of interest on any obligation owing by Maker to the
Holder in excess of the maximum rate of interest permitted by applicable law.
Maker understands and believes that the obligations evidenced by this Note
comply with all applicable usury laws; however, if any interest or other charges
in connection with the obligations evidenced by this Note are ever determined to
exceed the maximum amount permitted by law, then Maker agrees that (a) the
amount of interest or charges payable pursuant to this Note shall be reduced to
the maximum amount permitted by law and (b) any excess amounts previously
collected from Maker in connection with this Note that exceeded the maximum
amount permitted by law shall be credited against the principal balance of this
Note then outstanding. If the outstanding principal balance hereunder has been
paid in full, the excess amount shall be refunded to the Maker.
The contracted for rate of interest with respect to the obligations
evidenced by this Note shall include, without limitation, the following:
-2-
(i) The interest rate calculated and applied to the principal balance of
this Note in accordance with the provisions hereof;
(ii) Post-maturity interest, calculated and applied to the principal
balance of this Note in accordance with the provisions hereof; and
(iii) All fees, charges, goods, things in action or any sum or things of
value ("Additional Sums") paid or payable by Maker in accordance with the
provisions of the Loan Agreement or this Note, howsoever described. If any such
Additional Sums may, under applicable law, be deemed to be interest with respect
to the lending transaction which is the subject of this Note and the Loan
Agreement, then, for the purpose of any applicable law that may limit the amount
of interest to be charged with respect to the lending transaction which is the
subject of this Note and Loan Agreement, such Additional Sums shall be payable
by Maker as, and shall be deemed to be, Additional Interest, and, for such
purposes only, the agreed upon and "contracted for rate of interest" of this
transaction shall be deemed to be increased by the rate of interest resulting
from the Additional Sums.
The Maker hereby waives diligence, presentment, demand, protest and notice
of any kind whatsoever. The non-exercise by the Holder of its rights hereunder
in any particular instance shall not constitute a waiver thereof in that or any
subsequent instance.
This Note shall be governed by and construed in accordance with the laws of
the State of Arizona.
The Maker waives the benefit of any statute of limitations affecting its
liability hereunder.
The Maker hereby irrevocably submits to the jurisdiction of the Superior
Court of Maricopa County, State of Arizona, or any successor to said Court, and
to the jurisdiction of the United States District Court for the District of
Arizona, or any successor to said Court, for purposes of any suit, action or
proceeding which relates to this Note. The Maker hereby waives and agrees, to
the extent permitted by applicable law, not to assert, by way of motion as a
defense or otherwise in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of the Arizona Courts, that the
suit, action or proceeding is brought in an inconvenient forum, that the venue
of the suit, action or proceeding is improper or that this Note or any
transaction provided for or contemplated herein may not be enforced in or by the
Arizona Courts. The Maker hereby agrees not to seek, and hereby waives, any
collateral review by any other court which may be called upon to enforce
judgment of any Arizona Courts of
-3-
the merits of any such suit, action or proceeding or the jurisdiction of said
Arizona Courts. Nothing herein shall limit the Holder's right to bring any suit,
action or other proceeding against the Maker in any other appropriate
jurisdiction or forum or to serve process on the Maker by any means authorized
by applicable law.
The Maker hereby waives, to the fullest extent possible under applicable
law, the right to trial by jury in any action, suit or proceeding brought by the
Holder to enforce its rights hereunder.
Time is of the essence with respect to the terms and provisions of this
Note.
TOWER AIR, INC.
By: /s/ X.X. Xxxxxxx
---------------------------
Title: VP - Finance
Tax ID No.: 00-000-0000
-4-
