Exhibit 10(36)
SECOND AMENDMENT TO
AIRCRAFT LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO AIRCRAFT LOAN AND SECURITY AGREEMENT (this
"Amendment") made and entered into as of this 13/th/ day of August, 1998 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
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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
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W I T N E S S E T H:
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WHEREAS, the Borrower and the Lender have previously entered into the
Aircraft Loan and Security Agreement dated as of May 8, 1996, as amended by the
First Amendment to Aircraft Loan and Security Agreement dated as of September
25, 1996 (the "First Amendment") (collectively, the "Loan Agreement");
WHEREAS, the Borrower has requested that the Lender grant to the Borrower a
deferral of the payment of principal (other than a $152,586.15 payment in May,
1998) for the period of April, 1998 through and including March, 1999 in
respect of the Amended and Restated Promissory Note dated December 24, 1997, in
the principal sum of $18,234,098.22 and to amend and restate such note to
provide for such principal deferral and an extension of the term for the
repayment thereof for a period of one year.
NOW THEREFORE, the undersigned hereto agree as follows:
1. DEFINITIONS.
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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.
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2.1 Section 1.1 of the Loan Agreement is amended by deleting the
definitions "Consolidated Note" and "Note" and inserting the following in place
thereof:
"CONSOLIDATED NOTE": collectively (a) that certain Consolidated,
Amended and Restated Promissory Noted dated March 25, 1996 issued by the
Borrower to the Lender, as at any time amended or restated, (b) that
certain Promissory Note dated November 27, 1996 issued by the Borrower to
the Lender, as at any time amended or restated and (c) any other note
issued by the Borrower to the Lender pursuant to the terms of the
Consolidated Loan Agreement, as at any time amended or restated."
"NOTE: that certain Promissory Note dated May 8, 1996 issued by
the Borrower to the Lender, as amended and restated by the Amended and
Restated Promissory Note dated May 8, 1996 and as at any time further
amended or restated."
2.2 Clause (b) of Section 2.4 is deleted in its entirety and
replaced by the following:
"The unpaid principal amount of the Loan together with any
unpaid accrued interest thereon and all other amounts owing
hereunder shall be repaid by the Borrower in full on February 28,
2003."
3. REPRESENTATIONS AND WARRANTIES.
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3.1 Except for the representations and warranties set forth in
Sections 6.4, 6.7, 6.8, 6.9, 6.10, 6.14, 6.16 and 6.17, the Borrower restates
the representations and warranties set forth in Section 6 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 New Note,
the Consolidated Note, the Amended Note and the Assignment Agreement
(collectively, the "Loan Document Amendments").
3.2 On and as of the date hereof, the Borrower represents and
warrants as follows:
(a) Except as set forth on Attachment A hereto, and as further
described in the opinion of Borrower's counsel delivered pursuant to Section 4
(g) hereof, there is no litigation currently pending or expected against the
Borrower before any court or
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administrative agency which may have a materially adverse effect on the assets,
business, financial condition or operations of the Borrower or which would or do
prevent or hinder the performance by the Borrower of its obligations under the
Documents.
(b) The Lender's Security Interest in and to the Aircraft, is duly
perfected and properly preserved and perfected and continues to constitute a
first priority security interest in and to the Aircraft, in accordance with
applicable laws and regulations.
(c) The Borrower (i) owns and holds good and marketable title to the
Other Aircraft and the Other Engines, free and clear of all liens, security
interest, charges, claims and encumbrances of whatsoever nature (other than the
Security Interest granted and conveyed to the Lender by the Consolidated
Mortgage) and (ii) will defend title to each Other Aircraft and each Other
Engine against the claims and demands of all parties.
(d) There is no further registration, recording or filing with
respect to the Aircraft, the Other Aircraft and the Other Engines necessary or
advisable in order to continue the Borrower's title thereto nor to continue the
perfection of the Security Interest in favor of the Lender in and to the
Aircraft, the Other Aircraft and the Other Engines other than the filing of the
Mortgage and the First Amendment to Amended Mortgage, and the Uniform Commercial
Code financing statements.
(e) Borrower has furnished to Lender financial statements unaudited
on an interim basis and related financial information as of June 30, 1998,
prepared by Borrower in accordance with generally accepted accounting principles
for interim financial information (the "Financial Statements"). Such Financial
Statements (including notes thereto) fully and fairly present the financial
condition of Borrower as of the dates of the balance sheets contained therein,
and the results of its operations for the periods then ended all in conformity
with GAAP on a basis consistent with that of financial statements for
corresponding prior periods. Except as disclosed therein, Borrower has no
material contingent liabilities (including liabilities for taxes). Since June
30, 1998, there has been no material adverse change in the business, operations
or financial condition of Borrower.
(f) The reports as to the status and condition of the Aircraft
Engines have been true and accurate in all material respects.
4. CONDITIONS PRECEDENT
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4.1 Notwithstanding anything contained in this Amendment or the other
Loan Document Amendments to the contrary, the obligation of the Lender to grant
the principal deferral requested by the Borrower and to extend the repayment
term in respect of the Consolidated Note and the Amended Note, as defined below,
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 August 13, 1998 in the principal
amount of $ 4,033,293.63 (the "New Note"), the Consolidated, Amended and
Restated Promissory Note dated August 13, 1998 in the principal amount of
$41,351,030.82 (the "Consolidated Note"), and the Amended and Restated
Promissory Note dated August 13, 1998, in the principal amount of $18,081,512.07
(the "Amended Note");
(c) The Borrower and the Lender have executed the Assignment
Agreement dated August 13, 1998 (the "Assignment Agreement").
(d) The Borrower has executed and delivered the precautionary
UCC-1 filing required by the Assignment Agreement.
(e) The Borrower and the Lender have executed and delivered the
Sixth Amendment to Consolidated, Amended and Restated Aircraft and Engine Loan
and Security agreement dated as of August 13, 1998.
(f) 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.
(g) The Lender has received an Opinion of Counsel from the
Borrower's counsel in form and substance acceptable to the Lender;
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(h) 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 the 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 enter into, execute and deliver the
Documents on behalf of the Borrower and a specimen signature of each of said
officers, (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 and
(iv) a representation that there have been no changes in the Borrower's Articles
of Incorporation and By-Laws since the First Amendment to the Loan Agreement.
(i) Such other agreements, certificates, instruments or legal
opinions in writing as shall be deemed by the Lender or its counsel reasonably
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.
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5.1 All references in the Loan Agreement and every other agreement,
instrument and document executed and delivered by the 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.
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6.1 The Borrower will upon receipt of invoices by the Lender or upon
the Lender's demand, pay to or reimburse the Lender for all reasonable out-of-
pocket expenses of the 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
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disbursements of the Lender's counsel incurred in connection with all
professional services rendered and disbursements incurred by said lawyers with
respect thereto.
6.2 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 the Lender hereby ratify and affirm all of the terms and conditions
of the Loan Agreement as amended hereby.
6.3 THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ARIZONA.
6.4 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 the Lender, and any
purported assignment or delegation without such consent shall be void.
6.5 Time is of the essence with respect to the terms and provisions
of this Amendment.
6.6 This Amendment may be executed in any number of counterparts, and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
Amendment.
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WITNESS WHEREOF, the parties hereto have executed this Second Amendment to
Aircraft Loan and Security Agreement as of the day and year first above written.
TOWER AIR, INC.
By /s/ ▇.▇. ▇▇▇▇▇▇▇▇
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Title Chairman, President & CEO
Tax ID No.: ▇▇-▇▇▇-▇▇▇▇
FINOVA CAPITAL CORPORATION
By ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title Division VP
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