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AMENDED and RESTATED LOAN AGREEMENT
between
PEGASUS AIRCRAFT PARTNERS, L. P.
and
CORESTATES BANK, N. A.
dated
as of JULY 20, 1995
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AMENDED and RESTATED
LOAN AGREEMENT
Amended and Restated LOAN AGREEMENT, (Loan Agreement originally dated as of
April 22, 1994) amended and restated as of June ___, 1995, between PEGASUS
AIRCRAFT PARTNERS, L.P., a Delaware limited partnership ("Borrower"), and
CORESTATES BANK, N.A., a national banking association ("CoreStates") .
WITNESSETH
WHEREAS, Borrower and CoreStates are parties to that Loan Agreement dated April
22, 1994 pursuant to which CoreStates agreed to advance Borrower a loan facility
of up to US $4,000,000;
WHEREAS, the Borrower and CoreStates have agreed, inter alia, to extend the
Maturity Date and to substitute certain Collateral thereunder; and
WHEREAS, the parties hereto now seek to amend and restate the Loan Agreement in
its entirety as hereinafter set forth.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS.
As used herein, the following terms shall have the meanings herein specified
unless the context otherwise requires. Defined terms in this Agreement shall
include the singular number, the plural and the plural number of the singular:
"Act" - the Federal Aviation Act of 1958, as amended, and the rules and
regulations promulgated thereunder, as in effect on the date hereof and as
modified or amended hereafter or any successor or substituted legislation at the
time in effect and applicable.
"Aircraft" - shall mean the TWA Aircraft.
"Aircraft Lease" - shall mean the TWA Lease.
"Air Transport" - Air Transport Leasing, Inc., the administrative
general partner of Borrower.
"Applicable Treasury Bond Obligation" - the debt obligation of the United States
Treasury having a maturity date nearest in time to the Maturity Date as
published in the Wall Street Journal.
"Assumption Agreement" - that certain Assumption Agreement dated as of April 30,
1992 among Borrower, Pegasus Aircraft Partners, L.P.
and CoreStates.
"Borrower Assignment" - that certain Assignment of Collateral, dated the date
hereof, made by Borrower in favor of CoreStates with respect to Borrower's 100%
beneficial interest in the TWA Trust Agreement.
"Borrowing Notice" - as defined Section 2.2(a) hereof.
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"Business Day" - any day other than Saturday, Sunday or any other day on which
commercial banks in Philadelphia are authorized or required to close under the
laws of the Commonwealth of Pennsylvania.
"Closing Date" - the date as of which this Agreement is executed and delivered
by the parties hereto.
"Collateral" - shall mean the Collateral (as such term is defined in the
Security Agreement) and the TWA Collateral (as such terms are defined in the
Borrower Assignment).
"Commitment" - shall mean at any time the principal sum of Four Million
Dollars (U.S. $4,000,000.00)
"Conversion Notice" - as defined in Section 2.2(b) hereof.
"Event of Default" - as defined in Article 7 hereof.
"FAA" - the Federal Aviation Administration provided for in the Department of
Transportation Act of 1966, as in effect on the date hereof and as modified or
amended hereafter, or any successor or substituted United States governmental
authority at the time having jurisdiction over the Collateral.
"Financing Documents" - this Agreement, the Note, the Security Agreement, the
Borrower Assignment, the TWA Trust Agreement and all documents executed and/or
delivered by or on behalf of the Borrower or Trustee in connection herewith or
therewith, including all amendments, modifications and supplements of or to
evidences delivered in connection therewith.
"Fixed Rate" - the rate of the Applicable Treasury Bond Obligation on the Fixed
Rate Date (the asking yield on the Fixed Rate Date, as specified in the Wall
Street Journal) plus 275 basis points per annum.
"Fixed Rate Date" - the Loan Closing Date with respect to a Fixed Rate Loan or
the date on which the interest on a Floating Rate Loan is converted to the Fixed
Rate.
"Fixed Rate Loan" - a Loan for which the interest rate then in effect is equal
to the Fixed Rate.
"Floating Rate" - the prevailing prime rate as set by CoreStates as is publicly
announced from time to time plus 50 basis points per annum.
"Floating Rate Loan" - a Loan for which the interest rate then in effect is
equal to the Floating Rate.
"General Partners" - Air Transport and PAMC.
"Indebtedness" - all obligations, contingent or otherwise, which in accordance
with generally accepted accounting principals should be classified upon
Borrower's balance sheet as liabilities other than (i) any accrued distributions
which Borrower is not contractually obligated to distribute to its partners,
(ii) the unamortized portion of the prepaid basic rent under any aircraft lease,
and
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(iii) any lessee security deposit delivered to Borrower which is required to be
held in a restricted cash account.
"Letter of Credit Agreement" - that certain Letter of Credit Agreement dated as
of April 30, 1992 between Trustee and CoreStates, as amended.
"Lien" - any pledge, security interest, encumbrance, lien or other charge of any
kind (including any agreement to give any of the foregoing), any conditional
sale or other title retention agreement or any lease in the nature thereof.
"Loans" - shall mean all Fixed Rate Loans and all Floating Rate Loans.
"Loan Closing Date" - each date on which a Loan is made to Borrower by
CoreStates hereunder.
"Loan Repayment Schedule" - as described in Section 2.3 hereof.
"Loan Term" - that period of time from the date hereof through the Maturity
Date.
"Maturity Date" - shall mean May 1, 1997. The Maturity Date may be extended for
additional annual periods at CoreStates sole discretion upon request by
Borrower.
"Note" - shall have the meaning ascribed to it in Section 2.3(a) hereof.
"PAMC" - Pegasus Aircraft Management Corporation, the managing general partner
of Borrower.
"Partnership Agreement" - that certain Amended and Restated Limited Partnership
Agreement of the Borrower, dated April 27, 1989, by and among PAMC, Air
Transport and each of the General Partners as attorney-in-fact for those Persons
who subsequently become Limited Partners.
"Payment Dates" - each March 1, June 1, September 1 and December 1 subsequent to
the date hereof and ending no later than sixty months from the Maturity Date.
"Post-Default Rate" - shall be (i) with respect to any amounts due (other than
interest) in respect of the Loan not paid when due, a rate per annum equal to
two percent (2%) in excess of the rate then in effect with respect to such Loan
as determined in accordance with Section 2.5(b) hereof and (ii) with respect to
any amounts due hereunder other than in respect of a Loan not paid when due, a
rate per annum equal to two percent (2%) in excess of the Floating Rate at such
time.
"Prepayment Amount" - with respect only to a Fixed Rate Loan, an amount equal to
the excess, if any, of (i) all payments of principal and interest which would
have been payable during the remainder of the Loan Term for any Fixed Rate Loan
pre-paid pursuant to Section 2.6 hereof discounted to present value at a rate
per annum equal to the yield to maturity of the Applicable
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Treasury Bond Obligation on the date of such prepayment over (ii) the
outstanding principal amount of such Fixed Rate Loan.
"Principal Office" - the principal office of CoreStates from time to time which
is presently located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
"Security Agreement" - that certain Security Agreement and Assignment of Lease,
pursuant to which Borrower shall grant CoreStates a security interest in and to
the TWA Aircraft and TWA Lease between Trustee and CoreStates entered into in
connection with this Agreement.
"Security Documents" - shall mean the Security Agreement and the Borrower
Assignment.
"Trustee" - Meridian Trust Company, not in its individual capacity but solely as
owner trustee, under the TWA Trust Agreement.
"TWA" - Trans World Airlines, Inc.
"TWA Aircraft" - that certain XxXxxxxxx Xxxxxxx DC-9-82 Aircraft bearing FAA
Registration Number N904TW and manufacturer's serial number 49156 together with
two Xxxxx & Xxxxxxx XX 8D-217A engines bearing manufacturer's serial numbers
P709716D and P70917D.
"TWA Lease" - that certain Lease dated as of May 20, 1993 and Supplement No. 1
thereto between Meridian Trust Company as lessor, as successor in interest to
DC-9T-I, Inc., and Trans World Airlines, Inc. as lessee, as amended by an
Amendment Agreement dated as of December 15, 1986, an Amendment No. 1, dated May
1, 1991 and Amendment No. 2 dated April 15, 1993 and an Amendment No.
3 to Lease dated January 16, 1995.
"TWA Trust Agreement" - that certain Trust Agreement, dated March 31, 1988,
between the Borrower, as beneficiary, and Trustee, as owner trustee, as amended.
(All capitalized terms used herein and not otherwise defined herein shall have
the meanings given them in the Security Agreement)
SECTION 2. AMOUNT AND TERMS OF LOAN.
2.1. The Loan. Subject to and on the terms and conditions of this Agreement,
CoreStates agrees to make loans (each a "Loan" and collectively, the "Loans") to
the Borrower from the date hereof up to the Maturity Date in an aggregate
principal amount not to exceed the Commitment.
2.2. Notice of Borrowings and Conversions.
(a) The Borrower shall give written notice to CoreStates (the
"Borrowing Notice") of each Loan requested hereunder. Each Borrowing Notice
shall be irrevocable and shall be effective only if received by CoreStates no
later than 12:00 noon (Philadelphia time) on the date which is three Business
Days prior to the date of the Loan. Each Borrowing Notice shall be in
substantially the form of Exhibit A hereto and shall contain the information set
forth therein, including, without limitation, (i) the amount of the Loan
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(which shall be at least $500,000 or such lesser amount as shall, when
aggregated with all other outstanding Loans, constitute the entire Commitment),
(ii) whether such Loan shall be designated as a Floating Rate Loan or a Fixed
Rate Loan, and (iii) a representation from the Borrower that (1) the
representations and warranties of the Borrower contained in Article 3 hereof and
any of the other Financing Documents are true and correct in all respects on the
date of such Borrowing Notice as if made on such date, unless such
representations and warranties expressly relate to another date, (2) there
exists no Event of Default hereunder, nor any default or event of default under
any of the other Financing Documents, and (3) all other conditions precedent to
the making of such Loan as set forth in Article 4 hereof have been fully
satisfied.
(b) If at such time no Event of Default shall have occurred and be
continuing, the Borrower shall have the right at any time to convert all or any
of the Floating Rate Loans to a Fixed Rate Loan at any time during the Loan Term
provided that the Borrower shall give CoreStates written notice (the "Conversion
Notice") of each such conversion. The Conversion Notice shall be irrevocable and
shall be effective on the third Business Day following receipt of the Conversion
Notice by CoreStates. Each Conversion Notice shall be in the form of Exhibit B
hereto, and shall contain the information set forth therein. The Borrower shall
not have the right to convert a Fixed Rate Loan to a Floating Rate Loan.
2.3. The Note.
(a) The Borrower's obligations to pay the principal of, and the
interest on, the Loans shall be evidenced by a secured promissory note (the
"Note") duly executed and delivered by the Borrower, in the form of Exhibit C
hereto. The Note shall be subject to repayment in accordance with Section 2.4
hereof.
(b) In lieu of issuing a new Note upon the making of each Loan other
than the initial Loan, the Borrower shall deliver to CoreStates, together with
each Borrowing Notice, a Loan Repayment Schedule which shall be attached to the
Note by CoreStates and which shall set forth the Loan Closing Date for such
Loan, the principal amount of such Loan, the interest rate on such Loan and the
principal to be paid on each Payment Date with respect to such Loan. In
addition, CoreStates shall maintain a loan account (the "Loan Account") in which
shall be recorded (i) all Loans and advances made by CoreStates to Borrower
pursuant to this Agreement, (ii) all payments made by Borrower on all such
Loans, and (iii) all other appropriate debits and credits as provided in this
Agreement, including, without limitation, all fees, charges, expenses and
interest. All entries in Borrower's Loan Account shall be made in accordance
with CoreStates' customary accounting practices as in effect from time to time
and shall show the date, amount and reason for such entry. Borrower promises to
pay the amount reflected as owing by it under its Loan Account and all of its
other obligations hereunder as such amounts become due or are declared due
pursuant to the terms of this Agreement. Notwithstanding the foregoing, the
failure by CoreStates to make such entries on the Loan Account or to attach a
Loan Repayment Schedule to the Note shall not affect the rights of CoreStates or
the obligations of Borrower hereunder
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in respect of the Loans.
2.4. Payments of Principal. The principal amount of each Loan shall be repaid in
accordance with a principal amortization schedule submitted by Borrower and
acceptable to CoreStates. Such amortization schedule shall include payments of
principal no less frequently than on each Payment Date. In no event shall the
term of each Loan exceed 60 months or extend more than 60 months from the
Maturity Date.
2.5. Interest.
(a) The Borrower shall pay to CoreStates interest on the unpaid
principal amount of each Loan on each Payment Date at rate per annum equal to:
(i) with respect to Fixed Rate Loans, the Fixed Rate; or (ii) with respect to
Floating Rate Loans, the Floating Rate. Such interest shall be due and payable
in arrears on each Payment Date.
(b) Notwithstanding the foregoing, the Borrower shall pay interest on
the Loan and any installment thereof, and on any other amount payable by the
Borrower hereunder (to the extent permitted by law) which shall not be paid in
full when due (whether at stated maturity, by acceleration or otherwise) for the
period commencing on the due date thereof until the same is paid in full at the
Post-Default Rate. Such interest shall be payable on demand of CoreStates.
(c) Anything in this Agreement or the Note to the contrary
notwithstanding, the obligation of the Borrower to make payments of interest
shall be subject to the limitation that payments of interest shall not be
required to be made to CoreStates to the extent that CoreStates' receipt thereof
would not be permissible under the law or laws applicable to CoreStates limiting
rates of interest which may be charged or collected by CoreStates. Any such
payments of interest which are not made as a result of the limitation referred
to in the preceding sentence shall be made by the Borrower to CoreStates on the
earliest interest payment date or dates on which the receipt thereof would be
permissible under the laws applicable to CoreStates limiting rates of interest
which may be charged or collected by CoreStates. Such deferred interest shall
not bear interest.
2.6. Prepayments.
(a) Optional Prepayment. The Borrower may, at its option, exercisable
on five Business Days prior written notice to CoreStates, prepay any Loan, in
full, but not in part, and shall deliver to CoreStates an amount equal to (i)
all accrued and unpaid interest on such Loan through the date of such
prepayment, (ii) the outstanding principal on such Loan, and (iii) the
Prepayment Amount.
(b) Mandatory Prepayment. If, at any time, the outstanding principal
amount of all Loans exceeds the Commitment or there shall have occurred an Event
of Default, the Borrower shall repay the principal amount of the Loans in an
amount equal to (i) such excess if the outstanding amount exceeds the
Commitment, (ii) all amounts due and owing thereunder if there shall have
occurred an Event of
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Default, or (iii) the Borrower shall begin implementation of a plan to liquidate
its assets with the intent to dissolve the Borrower, in each case, along with
all accrued and unpaid interest on such excess through the date of such
prepayment and any related Prepayment Amount.
2.7. Fees. The Borrower agrees to pay to CoreStates a commitment fee, which fee
shall be paid quarterly on each Payment Date and shall be equal to the product
of (1) .125% and (2) the Commitment on such Payment Date less the average daily
outstanding amount of Loans during the period from the immediately preceding
Payment Date to such Payment Date (the "Commitment Fee").
2.8. Use of Proceeds. The proceeds of the Loans made hereunder shall be used by
Borrower solely for the maintenance, modification work, and upgrades (including
cash needed to exchange off-lease equipment for like equipment on lease) on
aircraft owned by the Borrower; provided that the proceeds of the first Loan may
be used as distributions to the partners of the Borrower.
2.9. Time and Method of Payments. All payments of principal, interest and other
amounts (including indemnities and the Commitment Fee) payable by Borrower
hereunder shall be made no later than 3:00 p.m. (Philadelphia time) at the
Principal Office in lawful money of the United States of America and in
immediately available funds. If any payment hereunder or under the Note becomes
due and payable on a day other than a Business Day, the due date thereof shall
be extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the rate set forth herein during
such extension.
2.10. Application of Payments. Any amounts paid hereunder on the Note, whether
by or on behalf of Borrower or as a result of receipt by CoreStates of the
proceeds of any sale of the Collateral, any proceeds of insurance, including any
liability insurance or indemnity payments, payable to Borrower or CoreStates
with respect to damage to or destruction of all or any part of any of the
Aircraft, and any other proceeds in any manner payable to Borrower or CoreStates
derived from any use, lease, disposition, disappearance or destruction of, or
damage to, any of the Aircraft paid to CoreStates (other than pursuant to
Section 2.6 hereof) or Borrower, shall immediately be paid to CoreStates for
application by CoreStates in following order and manner:
First, to pay the interest then accrued on the Loans and the Prepayment
Amount, if any;
Second, the payment of costs, fees, expenses and indemnities
(including, without limitation, amounts payable under Section 8.1 hereof) of
CoreStates, in respect of the Loans or in regard to the collection of such
amounts;
Third, to repay the then outstanding principal amount of the Loans; and
Fourth, to Borrower.
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SECTION 3. REPRESENTATIONS AND WARRANTIES.
In order to induce CoreStates to enter into this Agreement and to make the Loans
provided for herein, Borrower makes the following representations and warranties
which shall survive the execution and delivery of this Agreement and the Note:
3.1. Good Standing: Authorization. The Borrower is a limited partnership duly
formed pursuant to the Delaware Revised Uniform Limited Partnership Act and
existing as a limited partnership in good standing in the State of Delaware;
PAMC is a corporation duly organized and existing and in good standing in the
State of California; Air Transport is a corporation duly organized and existing
and in good standing in the State of Delaware; each of the Borrower and the
General Partners is duly qualified and in good standing and authorized to do
business in all jurisdictions wherein the nature of its business or property
makes such qualification necessary (except where the failure to so qualify would
have no material adverse consequence on the validity and enforceability of the
Loans and the security interests granted by the Security Agreement or otherwise
in the Collateral) ; and each of the Borrower and the General Partners has the
requisite power and authority to own the properties which it now owns, to carry
on its business as now conducted, to execute, deliver and perform this Agreement
and each of the other Financing Documents to which it is a party, as
contemplated hereunder and thereunder. Each of the Financing Documents to which
the Borrower or the General Partners is a party constitutes (or when issued,
executed and delivered pursuant to this Agreement will constitute) the
respective valid and binding obligations of the Borrower or the General
Partners, as the case may be, enforceable against the Borrower or the General
Partners, as the case may be, in accordance with the terms thereof, except as
such enforceability may be limited by applicable bankruptcy, insolvency or
similar laws from time to time in effect that affect creditors' rights generally
or by limitation upon the availability of equitable remedies. The execution,
delivery and performance of the Financing Documents have been duly authorized by
all necessary proceedings on the part of the Borrower and the General Partners,
as the case may be.
3.2. Compliance with Other Instruments. The execution, delivery and performance
of the Financing Documents will not conflict with, or result in any violation or
breach of, constitute a default under or (except as expressly contemplated by
the Security Documents) result in the creation of any security interest in
respect of any property of the Borrower or the General Partners pursuant to: (i)
the Partnership Agreement or the charter or by-laws of the General Partners,
(ii) any judgment, decree, order, statute, rule or regulation applicable to the
Borrower or the General Partners, or (iii) any agreement or instrument to which
the Borrower or the General Partners is a party. Neither the Borrower nor the
General Partners is (or, as a result of the consummation on each Loan Closing
Date of the transactions contemplated hereby, will be) in violation of any term
of the Partnership Agreement or the charter or by-laws of the General Partners,
or of any term of any agreement, instrument, judgment or Law applicable to it,
the violation of which could be reasonably expected to materially adversely
affect the business, operations, properties, or financial
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position of the Borrower or the General Partners. Without limiting the scope of
the foregoing, each of the Borrower and the General Partners is in compliance in
all respects with all federal and state laws, the noncompliance with which could
have a material adverse impact on the Borrower or the General Partners.
3.3. Liens. Except for permitted Liens, all of the Collateral is and will
continue to be owned by Borrower or Trustee, free and clear of all Liens.
3.4. Government Approvals. Neither the Borrower, the General Partners, nor any
of the other holders of partnership interests in the Borrower is required to
obtain any order, consent, approval or authorization of, or required to make any
declaration or filing (other than the filing of financing statements and
aircraft mortgages) with, any governmental authority in connection with the
execution and delivery of the Security Documents and the granting of the
security interests in the Collateral pursuant to any of the Security Documents.
3.5. Full Disclosure. There is no material fact that the Borrower has not
disclosed to CoreStates or which is not disclosed in the Borrower's filings with
the Securities and Exchange Commission under the Securities Exchange Act of 1934
which might reasonably be expected to have a material adverse effect on the
business, operations, properties or financial position of the Borrower or the
General Partners. The certificates and statements delivered herewith or
heretofore by the Borrower to CoreStates in connection with the negotiation,
execution and consummation of this Agreement, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to keep the statements contained herein or therein form being
misleading.
3.6. No Default. No event has occurred and is continuing which constitutes an
Event of Default. To the best of Borrower's knowledge, no default or event of
default has occurred and is continuing under the TWA Lease.
3.7. Material Agreements. The Borrower is not in default under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other material
agreement or obligation to which it is a party or by which any of its properties
are bound the result of which is likely to have a material adverse effect on the
Borrower.
3.8. Pending Litigation. There are no actions, suits, proceedings or
investigations pending, or so far as the Borrower is aware, threatened, against
or affecting the Borrower or any properties or any rights of the Borrower,
before any court, arbitrator or governmental body which, in the aggregate, might
adversely affect any action taken or to be taken by the Company under the
Agreement or which, in the aggregate, might materially adversely affect the
business, operations, properties or financial position of the Borrower.
3.9. Partnership Status for Tax Purposes. The Borrower is a "Partnership" for
Federal income tax purposes within the meaning of 7701(a) (2) of the Code.
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3.10. Citizenship. The Borrower and the General Partners are citizens of the
United States within the meaning of Section 101(16) of the Federal Aviation act
of 1958, as amended, and the regulations thereunder.
3.11. Subsidiaries. The Borrower has no subsidiaries.
3.12. Taxes. The Borrower and the General Partners have filed all Federal and
State income tax returns which are required to be filed, and have paid all taxes
as shown on said returns and all assessments received by it to the extent that
such taxes have become due, other than taxes being contested in good faith.
3.13. Security. As of the date of each Loan, the Security Agreement, the
Borrower Assignment and security interests granted to CoreStates pursuant to the
Security Documents in the property purported to be covered thereby (i) will
constitute a perfected security interest under the UCC or, with respect to the
Aircraft or interests therein otherwise subject to laws covering Liens in the
Aircraft and related interests, the relevant laws of the United States (the
"Recording Acts"), (ii) will be entitled to all of the rights, benefits and
priorities provided by the UCC or the Recording Acts, as applicable, and (iii)
will be superior and prior to the rights of all third Persons now existing or
hereafter arising whether by way of any Lien or otherwise, in each case assuming
compliance with the applicable Recording Act. On or promptly after the date of
the initial Loan, all recordations and filings shall have been accomplished with
respect to the Security Documents in each jurisdiction as may be required by law
to establish and perfect CoreStates's rights in and to the Collateral, and any
giving of notice or any other action to such end required by law has been given
or taken.
3.14. Principal Office. Borrower's chief executive offices and principal places
of business are in San Francisco, California and Weehawken, New Jersey.
3.15. Additional Representations. The Borrower makes each of the representations
and warranties which are set forth in the other Financing Documents to which the
Borrower is a party to, and for the benefit of, CoreStates as if the same were
set forth at length herein.
SECTION 4. CONDITIONS PRECEDENT.
4.1. Conditions Precedent to the Initial Loan. The obligations of CoreStates to
make the initial Loan to be made by it hereunder shall be subject to the
fulfillment (to the satisfaction of CoreStates) of the following conditions:
(a) Trustee shall have duly executed and delivered to CoreStates the
Security Agreement;
(b) Borrower shall have duly executed and delivered to CoreStates the
Note;
(c) Borrower shall have duly executed and delivered to
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CoreStates the Borrower Assignment;
(d) CoreStates shall have received a favorable opinion of Aispach,
Xxxxxxxxx & Danhauser, special counsel for Borrower addressed to CoreStates and
dated the date hereof;
(e) TWA, the Borrower, and Trustee shall have duly executed and
delivered to CoreStates The Acknowledgment of and Consent to Assignment of Lease
Agreement, dated the date hereof, pertaining to the TWA Lease;
(f) CoreStates shall have received a certificate of insurance, or
insurance policy, with respect to the TWA Aircraft and CoreStates shall be named
an additional loss payee on such policy;
(g) CoreStates shall have received a certificate of an officer of each
of PAMC and Air Transport, the general partners of Borrower, attaching copies of
PAMC's or Air Transport's, as the case may be, (i) Certificate of Incorporation,
(ii) By-Laws, (iii) Resolutions adopted by the respective Board of Directors
authorizing the transactions contemplated hereby, and (iv) the incumbency and
signatures of the officers;
(h) Borrower and Trustee shall have duly executed Uniform Commercial
Code Financing Statements and such statements shall have been filed in the
States of California, New Jersey and Pennsylvania with respect to the Borrower's
Assignment and the Security Agreement;
(i) To the extent the same exists Borrower shall have delivered to
CoreStates the manually executed counterpart of the TWA Lease, which TWA Lease
is legended as "Counterpart No. 1" or "Original", or if such legended
counterpart does not exist then the only counterpart, which if such Lease is
chattel paper under the Uniform Commercial Code, in which a security interest
can be perfected by possession;
(j) Borrower shall have delivered to CoreStates a duly executed
Borrowing Certificate with respect to the initial Loan; and
(k) All documentation required by CoreStates in connection with this
Agreement shall be satisfactory to CoreStates.
4.2. Conditions Precedent to the Subsequent Loans. The obligations of CoreStates
to make the Loans to be made by it hereunder other than the initial Loan shall
be subject to the fulfillment (to the satisfaction of CoreStates) of the
following conditions:
(a) Borrower shall have delivered to CoreStates a duly executed
Borrowing Certificate with respect to the such Loan; and
(b) All documentation required by CoreStates in connection with this
Agreement shall be satisfactory to CoreStates.
RIDER
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4.3 Other Conditions In addition to the foregoing, the obligations of the
parties hereto with respect to the transactions contemplated hereby shall be
subject to the fulfillment of the following conditions:
(a) in termination and release of any and all of CoreState's security
interests in and to that Boeing model 747-143 aircraft bearing
MSN 19729 and U.S. Reg. N17010, as equipped with four (4) Xxxxx &
Whitney JT9D-7A engines, and the lease of the same to Continental
Airlines, Inc; and
(b) the termination and release of any and all CoreStates second lien
in and to the Borrower's beneficial interest in and to that
XxXxxxxxx Xxxxxxx model MD-81 aircraft bearing MSN 48094, and
U.S. Reg. N814US, as equipped with two (2) Xxxxx & Whitney model
JT8D-217 engines, and the lease of the same to USAir, Inc. to the
extent and only to the extent such second lien collateralizes
Borrower's liabilities for the Loans made hereunder.
Each of CoreStates and Borrower agrees to execute and deliver any and
all such documents and make any and all required FAA and UCC filings
simultaneously with the creation of the security interests in and to the TWA
Aircraft and the TWA Lease as contemplated by the Security Agreement.
SECTION 5. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that so long as the Commitment is in effect
and until the Note together with interest, and all other obligations incurred
hereunder, are paid in full, the Borrower will or will cause the Lessee to:
5.1. Inspection. Allow any person acting on behalf of CoreStates to visit and
inspect the Aircraft, to examine its books of record and account and to discuss
its affairs, finances and accounts with its officers, all at such times and as
often as CoreStates may reasonably request, and at CoreStates sole expense in
accordance with the terms of the Aircraft Lease during normal business hours.
5.2. Payment of Charges. Duly pay and discharge (a) all of its trade bills
before the time that any Lien attaches and (b) all taxes, assessments and
governmental charges or levies imposed upon or against it or its property or
assets, or upon any property leased by it, prior to the date on which penalties
attach thereto, and (c) all lawful claims, whether for labor, materials,
supplies, services or anything else, which might or could, if unpaid, become a
Lien upon such property or assets, unless and to the extent only that (in
respect of any such taxes, assessments, charges, levies or claims) the validity
thereof is being contested in good faith and, if appropriate, by proper
proceeding, provided that, in the case of any such contest, the Borrower
maintains appropriate reserves with respect thereto or has made adequate
provision for the payment thereof, in accordance with generally accepted
accounting principles; provided, however, that to the extent that this Section
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5.2 applies to a lessee of the Aircraft, Borrower shall only be required to pay
or discharge those amounts as they relate to the Aircraft.
5.3. Maintenance of Records. Subject to the terms of the applicable aircraft
lease, keep at all times books of record and account in which full, true and
correct entries will be made of all material dealings or transactions in
relation to its business and affairs, and the Borrower will provide adequate
protection against loss or damage to such books of record and account.
5.4. Insurance. Borrower shall (i) cause the Aircraft to be maintained in
accordance with the provisions of the Aircraft Lease, but in no event shall (a)
casualty value insurance on the Aircraft be less than the greater of (1) the
fair market value of the Aircraft or (2) $5,000,000 and (b) liability insurance
be less than the limits presently prescribed under the TWA Lease, (ii) maintain
or cause to be maintained all such insurance as is required to be maintained
pursuant to Section 2.21 of the Security Agreement and (iii) cause such
insurance to be written by an insurer acceptable to CoreStates, which acceptance
shall not be unreasonably withheld.
5.5. Leases. Give CoreStates written notice of all material terms of any lease
to be entered into with respect to the TWA Aircraft at least 30 days prior to
entering into such lease or within such time as is reasonably practical in
connection with such lease.
5.6. Further Assurances. Take all such other steps and actions, and sign such
documents, financing statements and other papers, as in CoreStates's reasonable
opinion may be necessary or advisable in order to assure to CoreStates the
security interest in the property granted to it by the Security Documents.
SECTION 6. NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitment is in effect
and until the Note, together with all interest thereon, and all other
obligations incurred hereunder, are paid in full, the Borrower will not:
6.1. Indebtedness. Incur any additional Indebtedness other than in connection
with the maintenance, repair, preservation, modification, or improvement of any
aircraft or flight equipment now owned by Borrower (including Indebtedness
necessary to acquire and install engine hush-kits or noise suppression
equipment), provided that such additional Indebtedness shall not exceed an
amount that results in the Borrower's aggregate Indebtedness exceeding Nine
Million Dollars ($9,000,000.00).
6.2. Type of Business. Enter into any business other than its ownership and
leasing of aircraft.
6.3. Liens. Create, assume or suffer to exist any Lien upon the Aircraft or any
of the Collateral whether now owned or hereafter acquired, except (i) Liens for
taxes not yet due or which are being contested in good faith by appropriate
proceedings; (ii) other
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Liens incidental to the conduct of its business or the ownership of its property
and assets which were not incurred in connection with the borrowing of money or
the obtaining of advances or credit and which do not, either individually or in
the aggregate, materially detract from the value of its property or assets or
materially impair their use in the operation of its business (provided that no
Lien on the Aircraft or any portion thereof or interest therein is permitted
under this clause (ii)); and (iii) Liens in favor of CoreStates.
6.4. Consolidation. Merger and Sale or Purchase of Assets. Wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, or otherwise dispose of (whether in one or in a series of
transactions) all or a substantial part of its property or assets (whether now
owned or hereafter acquired), or purchase, lease or otherwise acquire all or any
substantial part of the property or assets of any Person, if such property or
assets would constitute a substantial part of the property or assets of the
Borrower, or agree to do any of the foregoing at any future time.
6.5. Advances and Loans. Except to a lessee or third party in connection with an
aircraft lease or a sale of an asset in the ordinary course of Borrower's
business, lend money or extend credit to any Person (including, but not limited
to, directors, officers, employees and stockholders) ; provided, however, that
with respect to any sale of an asset in the ordinary course of business, such
loan or extension of credit shall be adequately secured by the equity in the
asset.
6.6. Prepayment, etc. If an Event of Default shall have occurred and be
continuing or the making of any prepayment would materially adversely effect the
Borrower's ability to pay its Indebtedness as it becomes due, make any
prepayment which is not required by a contract to which the Borrower or any of
its property is subject or bound by law on account of the principal of the
indebtedness evidenced thereby or, unless required by any such contract or by
law, retire (by acquisition) or enter into any modification, amendment or
restructuring relating to any such indebtedness if the effect of any such action
would be to accelerate principal payment thereof.
6.7. Investments. Invest in (by capital contribution or otherwise), or acquire
or purchase or make any commitment to purchase the obligations or stock of (or
other form of equity interest in), any Person, except as permitted under the
Partnership Agreement.
6.8. Amendments to Agreements. Modify, amend, change, supplement or cancel,
terminate or assign or transfer any interest in, or agree to vary or waive any
rights under, the Trust Agreement or any document executed in connection
therewith, without CoreStates's prior written consent.
6.9. Principal Office. Change its chief executive office or principal place of
business without 15 days' prior written notice to CoreStates.
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SECTION 7. EVENTS OF DEFAULT.
If any one or more of the following events (each an "Event of Default") shall
occur and be continuing then, at CoreStates option, the entire unpaid balance of
the principal and interest on the Loans and all other obligations and
indebtedness of Borrower to CoreStates arising hereunder and under the other
Financing Documents shall immediately become due and payable with presentment or
demand for payment, notice of non-payment, protest or notice or demand of any
kind, all of which are expressly waived by Borrower:
(a) Borrower shall fail to make, within five days of the date when due,
whether at maturity, at a date fixed for payment thereof, on acceleration
thereof or otherwise, any payment of principal or interest upon the Note; or
(b) Any representation or warranty or statement made by Borrower or
Trustee herein or in any Financing Document, or in any certificate or statement
furnished pursuant hereto or thereto prove to have been untrue in any material
respect on the date as of which made; or
(c) Any covenant made by Borrower or the Trustee herein or in any
Financing Document, or in any certificate or statement furnished pursuant hereto
or thereto or in connection herewith or therewith shall be breached; or
(d) (i) Borrower shall make an assignment for the benefit of creditors,
file a petition in bankruptcy, be adjudicated insolvent or bankrupt, petition or
apply to any tribunal for the appointment of, or have appointed in respect of
it, a receiver, manager, statutory manager, custodian, or any trustee for it or
a substantial part of its assets, or shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or any order is made that it be wound up or that a liquidator or similar
officer is appointed in respect of it or it resolves to wind itself up or
otherwise dissolve itself or gives notice of its intention to do so, except to
reconstruct or amalgamate on terms approved by CoreStates or there shall have
been filed any such petition or application, or any such proceeding shall have
been commenced against it, which remains undismissed for a period of sixty (60)
days or more; or Borrower by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
the appointment of a custodian, receiver, manager, statutory manager or any
trustee for it or any substantial part of its assets or Borrower shall suffer
any custodianship, receivership, statutory management or trusteeship to continue
undischarged for a period of sixty (60) days or more; or
(ii) Borrower shall "generally not pay its debts as such debts
become due," as such term is used under the Federal bankruptcy statute and the
same shall not be cured within sixty (60) days; or
(iii) Borrower shall have concealed, removed, or
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permitted to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them, or made or suffered a
transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law, or, while insolvent, shall have made any
transfer of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid; or shall have suffered or
permitted, while insolvent, any creditor to obtain a lien upon any of its
property thought legal proceedings or distraint which is not vacated within
sixty (60) days form the date thereof; or
(e) The removal, withdrawal or termination of both of the general
Partners as the general partners of Borrower; or
(f) Any default shall occur under any Financing Document which is not
cured within any cure period provided for therein; or any Financing Document
shall be disaffirmed or repudiated in any material respect by or on behalf of
any party thereto other than CoreStates; or
(g) Any default shall occur under the Letter of Credit Agreement or the
Assumption Agreement which is not cured within any cure period provided for
therein; or the Letter of Credit Agreement or the Assumption Agreement shall be
disaffirmed or repudiated in any respect by or on behalf of any party thereto
other than CoreStates; or
(h) Attachments or other liens except for the security interests
created in favor of CoreStates under the Security Documents, shall be issued or
entered against the Collateral and the same shall not be released and terminated
within sixty (60) days.
SECTION 8. MISCELLANEOUS.
8.1. Expenses.
(a) Whether or not the transactions hereby contemplated shall be
consummated, Borrower shall pay all reasonable out-of-pocket costs and expenses
of CoreStates incurred in connection with (x) the preparation, execution,
delivery, administration, filing and recording of, and (y) the amendment
(including any waiver or consent), modification, and enforcement of or
preservation of any rights under, this Agreement, the Note and the Financing
Documents, (A) the reasonable fees and expenses of counsel for CoreStates, and
any special, local and foreign counsel retained by CoreStates, and (B) the
administrative costs of Trustee.
(b) The Borrower agrees to pay, and to save CoreStates harmless from
all present and future stamp, filing and other similar taxes, fees or charges
(including interest and penalties, if any), which may be payable in connection
with the Financing Documents or the issuance of the Note or any modification of
any of the foregoing.
(c) The Borrower shall indemnify, pay and hold harmless CoreStates, any
Bank Assignee (as defined in Section 8.7) and the
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holders of the Note from and against any and all liabilities, obligations,
losses, damages, penalties, judgments, costs, expenses and disbursements
(including, without limitation, legal fees and expenses) of any kind whatsoever
which may be incurred by or asserted against CoreStates or the holders of the
Note (each, the "Indemnified Party") in any way related to or in connection with
any claim, action, suit, investigation or proceeding (in each case, regardless
of whether or not the Indemnified Party is a party thereto or target thereof) in
any way relating to the Collateral or in any way relating to the Borrower or
relating to or arising out of this Agreement, the Aircraft Lease, or any of the
other Financing document or other documents or transactions in connection
herewith or therewith or relating thereto; provided, however, that Borrower
shall not be liable to any Indemnified Party for any portion of such
liabilities, obligations, losses, damages, penalties, judgments, costs, expenses
or disbursements resulting from such Indemnified Party's gross negligence or
willful misconduct.
(d) All obligations provided for in this Section 8.1 shall survive any
termination of the Agreement and the payment in full of the Note.
8.2. Modification. This Agreement and the Note may be modified only by an
instrument in writing signed by the parties hereto.
8.3. Governing Law. This Agreement and the rights and obligations of the parties
hereunder and under the Note shall be construed in accordance with, and be
governed by, the law of the State of New York.
8.4. Notices. All notices required hereby or provided for herein shall be
delivered to each party hereto at the address set forth below or to such other
address given by any such party to all other parties hereto in the manner
provided herein. Each such notice shall be deemed given when received. Notices
may be given by first-class mail, postage prepaid, such notices deemed delivered
on the third business day after (not including) the date of the mailing; by hand
delivery, such notices deemed received on the day delivered (provided such
delivery is made prior to 4:00 PM local time of the delivered party); and by
telefax for teletype, such notices deemed received on the day sent (provided
such notice is so sent prior to 4:00 PM local time of the delivered party).
If to Borrower, to it at:
Xxxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: 000-000-0000
with a copy to:
Pegasus Aircraft Management Corporation
Xxxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: 000-000-0000
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and
Air Transport Leasing, Inc.
0000 Xxxxxx Xxxx.
0xx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy No.: 000-000-0000
If to CoreStates, to it at:
Leasing Department
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy No.: 000-000-0000
8.5. Waiver. CoreStates's rights, powers, privileges and remedies under
or in connection with this Agreement and the Note are cumulative and not
exclusive and shall not be waived, precluded or limited by any failure or delay
in the exercise thereof or by the partial exercise thereof or by any course of
dealing between the Borrower and CoreStates. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the right
of CoreStates to any other or future action in any circumstances without notice
or demand.
8.6. Descriptive Headings, etc. The descriptive headings used in this
Agreement are for convenience only and shall not be deemed to affect the meaning
or construction of any provision hereof.
8.7. Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns and in particular any holder from time to time of the Note, except that
the Borrower may not transfer or assign any or all of its rights or obligations
hereunder without the prior written consent of CoreStates. In furtherance of the
foregoing, CoreStates shall be entitled at any time to grant participations in
or assign, sell or otherwise transfer the whole or any part of its rights and/or
obligations under this Agreement, the Financing Documents or any Loan or the
Note to any Person provided that such assignee shall agree to be bound by the
terms of this Agreement and further provided that any such assignment, sale or
transfer shall not expand or increase any of the Borrower's obligations or
liabilities hereunder and under the other documents and agreements delivered in
connection herewith. CoreStates shall use its best efforts to give the Borrower
five (5) days prior written notice of any such participation or assignment. No
such participation, assignment, sale or other transfer shall relieve CoreStates
from its obligations hereunder and the Borrower need deal solely with CoreStates
with respect to waivers, modifications and consents to this Agreement, the
Financing Documents or the Note. Any such participant, assignee, purchase or
transferee is referred to in this Agreement as a "Bank Assignee". Borrower
agrees that the provisions of Section 8.1 (c) shall run to the benefit of each
Bank Assignee and its participations or interests herein, and CoreStates may
enforce such provisions on behalf of any
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such Bank Assignee. The Borrower hereby further agrees that any such Bank
Assignee may, to the fullest extent permitted by applicable law, exercise the
right of setoff with respect to such participation (and in an amount up to the
amount of such participation) as fully as if such Bank Assignee were the direct
creditor of the Borrower. Upon a participation, assignment, sale or transfer in
accordance with the foregoing, the Borrower shall execute such documents and do
such acts as CoreStates may reasonably request to effect such assignment.
CoreStates may furnish any information concerning the Borrower in its possession
from time to time to Bank assignees (including prospective Bank Assignees).
8.8. Execution and Effectiveness. This Agreement may be executed in
counterparts, each of which shall be regarded as an original and all of which
shall constitute a single instrument and shall become effective on the date (the
"Effective Date") when each of the parties hereto shall have signed a copy
hereof (whether the same or different copies) and CoreStates shall have received
a copy executed by each party. Complete sets of counterparts shall be lodged
with both parties.
8.9. Consent to Jurisdiction. The Borrower agrees that any legal action or
proceeding against the Borrower, with respect to the Agreement or the Note or
the other Financing Documents, may be brought in the courts of the State of New
York in New York County or of the United States of America for the Southern
District of New York, as CoreStates may elect, and, by execution and delivery of
the Agreement, the Borrower accepts, for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Borrower irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified airmail, postage prepaid, to the Borrower at
its address for notices as specified herein, such service to become effective 3
days after such mailing. Nothing herein shall affect the right to serve process
in any other manner permitted by law or the right of CoreStates to bring legal
action or proceedings in any other competent jurisdiction. THE BORROWER HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
NOTE OR THE OTHER FINANCING DOCUMENTS.
8.10. No Third Party Beneficiaries. This Agreement is solely for the benefit of
CoreStates, the Borrower, and their respective successors and assigns and
nothing contained herein shall be deemed to confer upon anyone other than the
Borrower and their respective successors and assigns any right to insist on or
to enforce the performance or observance of any of the obligations contained
herein. All conditions to the obligations of CoreStates to make the Loan
hereunder are imposed solely and exclusively for the benefit of CoreStates and
its successors and assigns and no other person shall have standing to require
satisfaction of such conditions in accordance with their terms and no other
Person shall under any circumstances be deemed to be beneficiary of such
conditions.
8.11. Survival. Each of the representations, warranties, terms, covenants,
agreements and conditions contained in this Agreement
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shall specifically survive the execution and delivery of this Agreement and the
other Financing Documents and the making of the Loan and shall, unless otherwise
expressly provided, continue in full force and effect until the Loan together
with interest thereon, the fees and compensation of CoreStates, and all other
sums payable hereunder or thereunder have been indefeasibly paid in full.
IN WITNESS WHEREOF, the parties hereto have executed this Restated and Amended
Agreement as of July 20, 1995.
PEGASUS AIRCRAFT PARTNERS L.P.
By: Pegasus Aircraft Management
Corporation, as Managing
General Partner
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President, General Counsel
and Secretary
By: Air Transport Leasing, Inc.
as Administrative General
Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
CORESTATES BANK, N.A.
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
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Exhibit A
BORROWING NOTICE
Pursuant to Section 2.2(a) of the Loan Agreement (the "Loan Agreement"),
originally dated April 22, 1994, and Amended and Restated as of July 20, 1995,
between PEGASUS AIRCRAFT PARTNERS, L.P. and PHILADELPHIA NATIONAL BANK,
INCORPORATED, as CORESTATES BANK, N.A., the undersigned hereby gives notice of
its borrowing to be made on ____________________,199_ of a [Floating rate Loan]
[Fixed Rate Loan] in the principal amount of ________________________________
____________________________ and ___________ /100 ($____________).
The undersigned hereby represents and warrants that on the date hereof (i) the
representations and warranties of the undersigned contained in Article 3 of the
Loan Agreement are true and correct on the date hereof, (ii) no Event of
Default, or an event which with the passage of time would constitute an Event of
Default, has occurred and is continuing, (iii) all conditions precedent set
forth in the Loan Agreement to the making of the Loan requested hereunder have
been fully satisfied and (iv) the Loan requested hereunder shall be paid in
accordance with the terms of the Loan Agreement.
Attached hereto is true and correct Loan Schedule, which Loan Schedule
accurately reflects the amount of the Loan requested hereunder, the Loan Closing
Date for the Loan requested hereunder, the interest rate on the Loan and the
principal amount to be paid on such Loan on each Payment Date.
Unless otherwise defined, capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Loan Agreement.
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IN WITNESS WHEREOF, the undersigned has executed this document the ____ day of
___________, 199__.
PEGASUS AIRCRAFT PARTNERS, L.P.
By: Pegasus Aircraft Management
Corporation, as Managing
General Partner
By: _______________________________
Name:
Title:
By: Air Transport Leasing Corp.,
as Administrative General
Partner
By: _______________________________
Name:
Title:
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LOAN SCHEDULE NUMBER ____ TO PROMISSORY NOTE MADE BY PEGASUS AIRCRAFT PARTNERS,
L.P. DATED _________ ____, 1995
Date of Borrowing:
Principal Amount of Borrowing:
Interest Rate:
Principal to be paid on each Payment Date with respect to the Loan:
PEGASUS AIRCRAFT PARTNERS, L.P.
By: Pegasus Aircraft Management
Corporation, as Managing
General Partner
By: _________________________
Name:
Title:
By: Air Transport Leasing Corp.,
as Administrative General
Partner
By: _____________________________
Name:
Title:
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Exhibit B
CONVERSION NOTICE
Pursuant to Section 2.2(b) of the Loan Agreement (the "Loan Agreement"),
originally dated April 22, 1994, as Amended and Restated on July 20, 1995,
between PEGASUS AIRCRAFT PARTNERS, L.P. and PHILADELPHIA NATIONAL BANK,
INCORPORATED, as CORESTATES BANK, N.A., the undersigned hereby gives irrevocable
notice of its conversion of the Floating Rate Loan in the principal amount of
$_______________, which Loan was originally made on ___________________, 199__,
to a Fixed Rate Loan, such conversion to be effective as of
__________________________, 199__.
The undersigned hereby represents that on the date hereof (i) the
representations and warranties of the undersigned contained in Article 3 of the
Loan Agreement are true and correct on the date hereof and (ii) no Event of
Default, or an event which with the passage of time would constitute an Event of
Default, or an event which with the passage of time would constitute an Event of
Default, has occurred and is continuing.
Unless otherwise defined, capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Loan Agreement.
IN WITNESS WHEREOF, this undersigned has executed this document the ___________
day of __________________,199___.
PEGASUS AIRCRAFT PARTNERS, L.P.
By: Pegasus Aircraft Management
Corporation, as Managing
General Partner
By: ________________________________________
Name:
Title:
By: Air Transport Leasing Corp.
as Administrative General
Partner
By: _______________________________________
Name:
Title:
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EXTENSION AND AMENDMENT OF $4 MILLION LINE OF CREDIT
BY
CORESTATES BANK, N.A.
TO
PEGASUS AIRCRAFT PARTNERS, L.P.
INDEX OF CLOSING DOCUMENTS
JULY 20, 1995
DOCUMENTS
1. Restated and Amended Loan Agreement among Pegasus Aircraft Partners,
L.P. ("Pegasus") and CoreStates Bank, N.A. ("CoreStates").
2. Security Agreement & Assignment of Lease (the "Security Agreement")
between Trustee with respect to Aircraft N904TW.
3. Assignment of Beneficial Interest from Pegasus to CoreStates with
respect to Pegasus's interest in the TWA Trust Agreement.
4. Acknowledgment of Assignment of Lease by TWA with respect to the TWA
Lease.
5. Direction and Instruction Letter to Trustee from Pegasus.
6. Letter from Trustee and Pegasus to CoreStates pursuant to which Trustee
and Pegasus agree that they will not pledge or grant a security
interest in the TWA Lease to any party other than CoreStates.
7. Certificate of Existence and Officers' Certificates of Pegasus Aircraft
Management Corp. and Air Transport Leasing Corp. attesting to
continuing validity of matters covered under prior Certificates.
8. Secretary's Certificate of Pegasus Aircraft Management Corp. ("PAMC"),
the managing general partner of Pegasus attaching certified copies of:
(a) Certificate of Incorporation of PAMC
(b) By-Laws of PAMC:
(c) Resolutions adopted by the Board of Directors of PAMC
authorizing the transactions contemplated hereby;
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(d) The incumbency and signatures of the officer of PAMC.
9. Secretary's Certificate of Air Transport Leasing Corp. ("Air
Transport"), the administrative general partner of Pegasus with respect
to:
(a) Certificate of Incorporation of Air Transport;
(b) By-Laws of Air Transport;
(c) Resolutions adopted by the Board of Directors of Air
Transport authorizing the transactions contemplated
hereby;
(d) The incumbency and signatures of the officers of Air
Transport.
10. Certificate of the Trustee attaching certified copies of the articles
of association and by-laws, corporate resolutions incumbency and
specimen signatures of officers authorized to execute the documents to
which the Trustee is a party.
11. Opinion of Xxxxxxx, Xxxxxxxxx & Xxxxxxxxxx, counsel to Pegasus, PAMC
and Air Transport, addressed to CoreStates.
12. Opinion of Xxxxxxxxx, Xxxxxx & Xxxxxxxx, special FAA Counsel.
13. Certificates of Insurance with respect to the TWA Aircraft.
14. UCC-1 Financing Statement filed with the Secretary of State of
California with respect to the security interest granted by Pegasus.
15. UCC-1 Financing Statement filed with the Secretary of State of New
Jersey with respect to the security interests granted by Pegasus.
16. UCC-1 Financing Statement to be filed with the Secretary of
Commonwealth of Pennsylvania and the Prothonotary of Reading county
with respect to the security interests granted by Trustee.
17. Delivery of the Original TWA Lease together with all amendments and
supplements appropriately stamped.
18. Copy of Pegasus Partnership Agreement.
19. Copy of Pegasus Trust Agreement.
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SECURITY AGREEMENT AND ASSIGNMENT OF LEASE
SECURITY AGREEMENT AND ASSIGNMENT OF LEASE (this "Agreement") dated as
of July 20, 1995, between Meridian Trust Company, a trust company organized and
existing under the laws of the Commonwealth of Pennsylvania, not in its
individual capacity, but (except as expressly noted in Section 7.7(b) herein)
solely as Owner Trustee ("Trustee") under the certain Trust Agreement dated as
of March 31, 1988 (the "Trust Agreement") for the benefit of Pegasus Aircraft
Partners, L.P. ("Pegasus"), as amended, relating to the "Aircraft" (as
hereinafter defined, with an office at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, XX 00000,
and CORESTATES BANK, N.A., a national banking association ("CoreStates") with an
office at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, Trustee is the owner of the Airframe and Engines (the Airframe
and Engines collectively referred to as the "Aircraft") as described on Schedule
1 attached hereto and made a part hereof;
WHEREAS, pursuant to the Trust Agreement, Trustee was appointed Owner
Trustee for the benefit of Pegasus with respect to the Aircraft;
WHEREAS, DC-9T-I, INC ("DC-9T-I"), as lessor and Trans World Airlines,
Inc., as lessee ("Lessee") entered into that certain Lease Agreement dated as of
May 20, 1983 and Lease Supplement No. 1, which was attached thereto and dated
May 24, 1983, which Lease, with Lease Supplement No. 1 attached was recorded by
the Federal Aviation Administration ("FAA") on September 22, 1983 and assigned
Conveyance Number H38434, as amended by an Amendment Agreement dated as of
December 15, 1986, between DC-9T-I as lessor and Lessee, recorded by the FAA on
January 26, 1987 and assigned Conveyance No. E91223 and assigned by Agreement of
Assignment and Assumption dated as of March 31, 1988, between DC-9T-I, as
assignor, and Meridian Trust Company ("Meridian"), as owner Trustee and
assignee, which Agreement of Assignment and Assumption was recorded by the FAA
on April 12, 1988 and assigned Conveyance No. C09394, and amended by Amendment
No. 1 to the Lease dated as of May 1, 1991, between Meridian, as lessor and
Lessee, which Amendment No. 1 was recorded by the FAA on June 10, 1991 and
assigned Conveyance No. G82584, an Amendment No. 2 to the Lease dated as of
April 15, 1993, between Meridian, as lessor and Lessee, which Amendment No. 2
was recorded by the FAA on May 3, 1993 and was assigned Conveyance No. JJ07770,
and an Amendment No. 3 dated as of January 16, 1995, which Amendment No. 3 is
being filed with the FAA contemporaneously herewith (collectively the "Aircraft
Lease").
WHEREAS, simultaneously herewith CoreStates is providing Pegasus, the
owner participant under the Trust Agreement, a $4,000,000 loan facility pursuant
to that certain Amended and Restated Loan Agreement (the "Loan Agreement"),
dated as of April 22, 1994, and amended and restated on July 20, 1995 between
Pegasus and CoreStates, the loans thereunder to be evidenced by a Promissory
Note, dated as of April 22, 1994, made by Pegasus in favor of CoreStates (the
"Note");
[RECORDED STAMP]
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WHEREAS, all amounts and other sums at any time due and owing from or
required to be paid by Pegasus under the terms of the Loan Agreement or the Note
or under this Security Agreement or any other Financing Document to or for the
benefit of CoreStates are hereinafter sometimes referred to as the "Indebtedness
Hereby Secured". (Unless otherwise indicated, all capitalized terms used herein
shall the meaning ascribed to them in the Loan Agreement).
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the parties hereto agree as follows:
1. Security Interest. In consideration of the Loans and other
good and valuable consideration, receipt whereof is hereby
acknowledged, and in order to secure the payment of the Indebtedness
Hereby Secured and the prompt performance and observance of all the
covenants and conditions contained in the Trust Agreement, the Loan
Agreement, the Note and in this Agreement, Trustee hereby mortgages,
assigns, pledges and grants a security interest in, and hypothecates
unto CoreStates, its successors and assigns, the following described
properties, rights, interests and privileges (all of which properties
are hereinafter collectively referred to as the "Collateral"):
DIVISION 1
The Aircraft, together with all accessories, attachments and
appurtenances at any time incorporated or installed in or appertaining
or attached to the Aircraft, whether now owned or hereafter acquired,
and all substitutions, renewals and replacements of, and improvements
to said Aircraft, together with all the rents, issues, income, profits
and avails thereof, and all logs, manuals and data and all records,
including, without limitation, all inspection, modification and
overhaul records, maintained with respect to the Aircraft.
DIVISION 2
All right, title and interest of Trustee in, under and to the
Aircraft Lease or any other lease entered into from time to time with
respect to the Aircraft (a "Subsequent Lease"), any lease schedules
thereto and amendments thereof, and all rights and remedies of the
lessor under the Aircraft Lease and any Subsequent Lease, any lease
schedules thereto and amendments thereof and all rents and other sums
due and to become due under the Aircraft Lease and any Subsequent
Lease, including without limitation any and all extensions or renewals
of the Aircraft Lease, any Subsequent Lease and any subleases
thereunder, and all re-lease rents and all guaranties or other
agreements securing or supporting the performance of the Lessee under
the Aircraft Lease or the lessee under a Subsequent Lease,
(collectively, the "Payment"); it being the intent and purpose hereof
that the assignment and transfer to CoreStates of the Payments with
respect to the Aircraft Lease and any Subsequent Lease shall be
effective and operative immediately
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and shall continue in full force and effect and CoreStates shall have
the right to collect and receive the payments for application in
accordance with the provisions of Section 5 hereto at all times during
the period from and after the date of the Agreement until the
Indebtedness Hereby Secured has been fully paid and satisfied;
provided, however, that so long as no Event of Default (as such term is
hereinafter defined) has occurred and is continuing, Trustee shall be
entitled to receive all payments under the Aircraft Lease other than
(i) any prepayments of Basic Rent or, with respect to a Subsequent
Lease, its equivalent, except to the extent that such prepayment
represents the next required payment of Basic Rent or its equivalent
and such prepayment is not made prior to the required payment date
which immediately precedes the required payment date that such
prepayment would otherwise be due, or (ii) payments made in connection
with the loss, damage, destruction or sale of the Aircraft, which loss,
damage, destruction or sale payments shall include without limitation,
any insurance proceeds, sale proceeds or payments representing
stipulated loss value or termination value.
DIVISION 3
All claims, rights, powers, privileges and remedies of Trustee with
respect to the Aircraft whether arising under the Aircraft Lease or by
statute, at law, in equity or otherwise.
DIVISION 4
All right, title and interest of Trustee under the Trust
Agreement, (as such term is defined in the Aircraft Lease), together
with all estates and interests therein and thereto, and all rights,
powers and privileges thereunder or in respect thereof, and any and all
payments thereunder or in respect thereof to which Trustee is or may
become entitled, but the foregoing shall not include rights, interests,
estates, powers and privileges of Meridian Trust Company in its
individual capacity, including, but not limited to indemnities,
undertakings, fees and payments due from Owner Participant to Meridian
Trust Company thereunder.
DIVISION 5
All proceeds of any of the foregoing including, without
limitation, insurance proceeds, termination payments, casualty loss
payments, accounts, chattel paper, goods, documents, instruments and
general intangibles.
2. Covenants and Warranties. Trustee, not in its individual
capacity but solely as Owner Trustee, covenants, represents, warrants
and agrees as follows:
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2.1 Warranty of Title. Trustee has good and marketable title to the
Collateral free and clear of all claims, liens, security interests or other
encumbrances (other than liens permitted under the Lease, under Section 6.3 of
the Loan Agreement, including but not limited to the lien created hereby),
subject to the right and interest of the Lessee under the Aircraft Lease.
Trustee has full power and authority to grant a security interest in the
Collateral to CoreStates and, hereby warrants said title to the Collateral
against all claims and demands whatsoever subject as aforesaid. No financing
statement, mortgage or other evidence of a lien or other encumbrance with
respect to the Collateral, other than to the extent that the Aircraft Lease is
deemed an encumbrance, exists or is on file or registered in any public office
other than those representing the rights and interests of CoreStates in the
Collateral.
2.2 Security Interest Created. This Agreement creates a valid, binding
and enforceable first priority security interest in favor of CoreStates in the
Collateral, which security interest shall be superior in right to all claims of
secured and unsecured creditors of Trustee, both individually and as Owner
Trustee, and to all other security interests, liens, claims and encumbrances.
2.3 Recordation and Filing. (a) Except as set forth in the following
sentence, no action, including any filing or recording of any document, is
necessary in order to afford protection to CoreStates under applicable law in
connection with the creation or enforcement of its security interest granted
hereunder as a perfected first priority security interest in the Collateral
other than (i) the filing of Uniform Commercial Code (the "Code") financing
statements with the Secretary of State of Pennsylvania and the Prothonotary of
Reading County, (ii) delivery to CoreStates of the manually executed counterpart
of the Aircraft Lease, which Aircraft Lease is legended as "Counterpart No. 1"
or " "Original," and (iii) the filing of this Agreement with the FAA, all of
which filings and deliveries have been properly made. The continued possession
of CoreStates of the Aircraft Lease may, under certain circumstances, be
required to maintain CoreStates' first priority security interest therein.
(b) Trustee will, at Trustee's own expense, do everything reasonably
necessary or expedient, as determined and explicitly directed by CoreStates, to
preserve, perfect and maintain, or cause to be preserved, perfected and
maintained, in favor of CoreStates a perfected security interest prior to all
other security interests in the Collateral as against Trustee and in the
Aircraft as against the Lessee and any subsequent transferee thereof, including,
without limitation, (i) causing all filings and doing all acts and things which
CoreStates may require to preserve its security interest in the Collateral in
the territory in which the Lessee may operate the Aircraft, in the territory in
which the Aircraft is registered and in the jurisdiction where the principal
offices of
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Trustee are located, including, without limitation, as may be required by the
Code or the law of any other applicable jurisdiction or as reasonably directed
by CoreStates in order to preserve and protect the rights of CoreStates
hereunder, and (ii) doing or causing to be done any and all acts and things
which may be required under the terms of any other agreement, or by any
practice, custom or understanding involving any state in which the Lessee may
operate, whether or not such agreement, practice, custom or understanding is
currently in force or effect, as may be necessary or as CoreStates may
reasonably request, to perfect and preserve its security interest in the
Collateral within the jurisdiction of any such state.
2.4 Further Assurance. Trustee will, upon written direction from
CoreStates and at Trustee's own expense, do such other and further acts,
execute, acknowledge and deliver all deeds, conveyances, transfers and
assurances reasonably necessary or proper for the better assuring, conveying,
assigning and perfecting CoreStates' interest in and confirming unto CoreStates
all of the Collateral. Trustee acknowledges that CoreStates may assign, upon
thirty (30) days prior notice to Trustee, its interest in the Collateral, this
Agreement or portions thereof provided such assignee assumes all of CoreStates'
obligations under this Agreement, the Loan Agreement, the Note and any related
instrument and agrees to comply with the provisions hereof and thereof. On
request by CoreStates, Trustee shall execute all documents that CoreStates may
reasonably require to confirm Trustee's obligations hereunder or the interest of
CoreStates in the Collateral. Notwithstanding this Agreement, Trustee will
perform all obligations of lessor under the Aircraft Lease, however, arising.
2.5 Performance and Compliance. Trustee shall perform and comply with
each and every term of this Agreement, the Loan Agreement, the Aircraft Lease
and the Trust Agreement and all other documents relating to the Collateral to be
performed or complied with by Trustee, and shall exercise its reasonable best
efforts to cause the Lessee, as lessee under the Aircraft Lease, to perform and
comply with each and every term of the Aircraft Lease.
2.6 Actions Under or With Respect to the Aircraft Lease and the Trust
Agreement. Trustee will not, without the prior written consent of CoreStates:
(a) Declare a default or exercise the remedies of the lessor
under the Aircraft Lease;
(b) Receive or collect or permit the receipt or collection of
any rental or other payment under the Aircraft Lease or extend any time for
payment under the Aircraft Lease or grant any waiver or consent under the
Aircraft Lease; provided, however, that so long as no Event or Default has
occurred and is continuing, Trustee shall be entitled to receive all payments
under the
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Aircraft Lease other than any prepayments of Basic Rent or, with respect to a
Subsequent Lease, its equivalent, except to the extent that such prepayment
represents the next required payment of Basic Rent or its equivalent and such
prepayment is not made prior to the required payment date which immediately
precedes the required payment date that such prepayment would otherwise be due,
or payments made in connection with the loss, damage, destruction or sale of the
Aircraft, which loss, damage, destruction or sale payments shall include without
limitation, any insurance proceeds, sale proceeds or payments representing
stipulated loss value or termination value; or
(c) Terminate prior to the scheduled termination date, amend, modify or
permit any termination, amendment or modification of, the Aircraft Lease, or the
Trust Agreement.
2.7 Notice of Certain Matters. Trustee shall give notice to CoreStates,
within ten (10) days of Trustee's obtaining actual knowledge thereof by an
officer of the corporate trust department, of any of the following:
(a) any litigation or claim of any kind against the Collateral
or the ability of CoreStates to dispose of the Collateral or the rights and
remedies of CoreStates in relation thereto, including but not limited to, the
filing of any liens or levy of any legal process against the Collateral and the
adoption of any orders, arrangements or procedures affecting the Collateral,
whether governmental or otherwise;
(b) any litigation or claim of any kind that might subject
Trustee, in its capacity as owner trustee, to any material liability;
(c) any dispute between Trustee and any governmental agency
relating to the Collateral, the adverse determination of which might materially
affect the Collateral;
(d) any threat or commencement of proceedings in condemnation
or eminent domain against the Collateral or any seizure of the Collateral;
(e) any Event of Default hereunder or event which, with the
giving of notice or the passage of time or both, would constitute an Event of
Default hereunder;
(f) any event of condition constituting an Event of Default
under the Aircraft Lease;
(g) the existence of any lien on or claim against any part of
the Collateral; and
(h) an event of loss or damage to the Collateral, or any
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replacement or exchange or any Airframe or any Engine, as those terms are
defined in the Aircraft Lease, (other than exchanges of Engines in the normal
course of Lessee's business in the manner and as permitted under the Aircraft
Lease), of which an officer of the corporate trust department of the Trustee has
actual knowledge.
2.8 Retention of Title. Except as permitted in Section 2.22 hereof,
Trustee will not encumber, sell, assign or otherwise dispose of any interest in
the Collateral, except as such is encumbered and assigned to CoreStates.
2.9 Organization. Meridian Trust Company is a trust company duly
organized and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania and is qualified to do business in all
jurisdictions in which qualification is required in order for it to carry out
the transactions contemplated by this Agreement, the Trust Agreement and the
Aircraft Lease; and the Trustee is empowered and authorized to own its
properties and carry on its business as now or hereafter conducted.
2.10 Authority; Validity. Trustee has full power and authority to
execute this Agreement and the other documents contemplated hereby and thereby
and to consummate the transactions contemplated hereby and thereby; the
execution and delivery of this Agreement and the other documents contemplated
hereby and thereby and the performance of Trustee's obligations hereunder and
thereunder have been duly authorized by all necessary corporate action; and each
of this Agreement and the other documents contemplated hereby and thereby
constitute the valid and binding agreement and obligation of Trustee,
enforceable against Trustee in accordance with its respective terms.
2.11 No Contravention. The execution, delivery and performance of this
Agreement and all other documents and agreements contemplated hereby to which
Trustee is a party will not (i) contravene any provision of Pennsylvania or
United States Federal law, governmental rule or regulation, writ, injunction,
decree, judgment or order applicable to Trustee, (ii) violate any provision of
Meridian Trust Company's articles of association or by-laws, or (iii) conflict
or be inconsistent with or result in breach of, any of the terms, covenants,
conditions, or provisions of, or constitute or default under or results in the
creation or imposition of (or the obligation to create or impose) any lien
(except pursuant to this Agreement) upon any indenture, mortgage, deed of trust,
agreement or other instrument to which Trustee is a party or by which it or any
of its property or assets is bound or to which it may be subject.
2.12 Approvals. No giving of notice to, registration with,
authorization or approval of, or taking any action in respect of or under any
federal law governing trust powers, laws of the Commonwealth of Pennsylvania or
any subdivision or agency thereof
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is required for the execution and delivery of this Agreement or for the validity
and enforceability hereof or for the grant of the security interest hereunder on
the terms and conditions herein provided, or, if any such actions or approvals
are so required, they have been so given and/or obtained, and, if any such
approvals are hereafter required, they will be promptly obtained.
2.13 Litigation. No actions, claims or proceedings are pending or, to
the best knowledge of Trustee, threatened against or affecting Trustee in any
court or before any arbitrator or government body, the adverse determination of
which would affect the validity of this Agreement, the rights of CoreStates or
its successors hereunder, or the ability of Trustee to perform its obligations
under this Agreement.
2.14 Tax Matters. Trustee shall pay or cause to be paid all charges,
taxes and assessments levied or assessed against itself which if unpaid would
constitute a lien on the Collateral, or the Aircraft Lease or any payments made
or to be made by the Lessee in respect thereof, which could result in the
imposition of any lien against the Collateral or any payments made or to be made
by the Lessee in respect thereof, other than liens for taxes not yet due.
2.15 Office. The chief executive office of Trustee is located at 00
Xxxxx Xxxxx Xxxxxx, Xxxxxxx, XX 00000, and Trustee shall give CoreStates at
least 30 days' prior written notice of any change in the location of Trustee's
chief executive office.
2.16 Aircraft Lease. (a) The Aircraft Lease and the Trust Agreement (i)
are in full force and effect in the form provided to CoreStates by Pegasus and
(ii) have not had any of the provisions thereof waived.
(b) All amounts due and payable under the Aircraft Lease prior
to the date hereof have been paid in full and no amounts due and payable on or
after the date hereof have been prepaid, in whole or in part;
(c) To the actual knowledge of officers of the corporate trust
department of the Trustee no event or condition constituting an Event of Default
under the Aircraft Lease or which with notice or lapse of time, or both, would
constitute such an Event of Default has occurred and is continuing under the
Aircraft Lease;
(d) Trustee will duly perform all of the obligations of the
lessor under the Aircraft Lease and shall remain liable thereunder to the Lessee
notwithstanding this Agreement or CoreStates' exercise of any of its rights or
remedies hereunder;
(e) To the actual knowledge of officers of the corporate trust
department of the Trustee, no Event of Loss (as
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defined in the Aircraft Lease) has occurred in relation to the Aircraft; and
(f) There is only one executed copy of the Aircraft Lease
bearing the legend "Counterpart No. 1" or "Original" which copy is being
delivered to CoreStates along with any lease supplements and amendments thereto
contemporaneously with the execution and delivery of this Agreement. All other
copies of the Aircraft Lease along with any lease supplements and amendments
thereto have been marked "Duplicate".
2.17 Compliance. Trustee shall deliver to CoreStates, from time to the
time upon CoreStates' explicit request, in form and substance satisfactory to
CoreStates, evidence requested by CoreStates that Trustee has complied with all
applicable laws, ordinances, regulations and other requirements of all
governmental agencies having jurisdiction over the Collateral and that all
necessary licenses, consents and approvals of any governmental agency have been
regularly and finally received with respect to the Collateral. Trustee shall
comply in all material respects with all laws and requirements applicable to its
business and obtain all authorization, consents, appraisals, orders, licenses,
exemptions with, any government agency that is necessary for the transaction of
its business.
2.18 Maintenance. Trustee shall maintain the Collateral (or cause the
Collateral to be maintained) in good condition and repair, and not permit any
material waste or damage with respect thereto, ordinary wear and tear excepted.
Trustee shall take or cause to be taken all measures reasonably required by
CoreStates and permitted under the Aircraft Lease to protect the physical
security of the Collateral. During the term of the Aircraft Lease and any
Subsequent Lease Trustee shall cause the Aircraft to be maintained in accordance
with the provisions of the Aircraft Lease, and of all other government,
regulatory or judicial bodies applicable to the Aircraft, to the extent required
by the Aircraft Lease, provided that such standards shall comply (or cause to be
compiled with) all noise, health, customs, immigration, agriculture and police
regulations and all rules and orders relating to the Aircraft that the Aircraft
may be subject to in its use and operation and in particular Trustee will not
permit the Aircraft to proceed to any airport or enter any airspace which is at
any time the subject or a prohibition or exclusion order by the insurers of the
Aircraft or by the government of the United States. Notwithstanding anything to
the contrary contained herein, provided that Lessee is compliance with its
obligations under the Aircraft Lease, then Trustee shall be deemed to have
complied with the requirements hereof. At such times that the Aircraft is
subject to neither the Aircraft Lease nor any Subsequent Lease Trustee shall be
obligated to the preserve the Aircraft in the condition in which it was returned
(assuming that it was returned in the condition required by the Aircraft Lease
or any Subsequent Lease) and in such
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condition that the Aircraft's certificate of airworthiness is continually
maintained.
2.19 Inspection. Trustee shall at all times prior to the indefeasible
repayment in full of the Indebtedness Hereby Secured, subject to the provisions
of the Aircraft Lease, permit CoreStates and its agents, (a) the right of entry
and free access to the Aircraft for any purpose, including without limitation,
to conduct an inspection or appraisal, and (b) the right to inspect and copy all
books, contracts and records of Trustee, or to which Trustee has a right of
access or inspection, pertaining to the Collateral.
2.20 Taxes. Trustee shall file all required tax and similar reports and
returns in all relevant jurisdictions and pay or cause to be paid all charges,
taxes and assessments levied or assessed against itself which if unpaid would
constitute a lien on the Collateral or the Aircraft Lease or any payments made
or to be made by the Lessee in respect thereof.
2.21 Insurance. Trustee shall maintain or cause to be maintained, at
its expense or at the expense of the Lessee, insurance in the same manner and to
the same extent as is provided in Section 11 of the Aircraft Lease, but in no
event shall (i) casualty value insurance on the Aircraft be in an amount less
than the greater of (1) the fair market value of the Aircraft or (2) $5,000,000
and (ii) liability insurance be less than the lesser of (1) $1,500,000 times the
number of seats in the Aircraft or (2) $300,000,000. All such insurance
coverages shall be in form and issued by insurers satisfactory to CoreStates
from time to time, shall name CoreStates as an additional insured, and with
respect to the Aircraft all-risk insurance, as loss payee, and shall provide
that the insurer shall notify CoreStates of a cancellation or material change in
such coverage at least thirty (30) days prior to such cancellation or change.
2.22 Releasing. Upon the expiration of the term of the Aircraft Lease,
Trustee will not enter into any Subsequent Lease unless (i) the insurance
required under the Subsequent Lease complies with the requirements of Section
2.21 hereof, (ii) the maintenance provisions contained in the Subsequent Lease
are no less stringent than general industry standards for comparable aircraft,
(iii) an appraisal by an independent appraiser mutually acceptable to Trustee
and CoreStates provides that the value of the Aircraft is in excess of
$5,000,000 when subjected to the Subsequent Lease, (iv) Trustee executes an
assignment of lease in favor of CoreStates which gives CoreStates a collateral
assignment in the Subsequent Lease and all payments thereunder equivalent to the
rights granted hereunder to CoreStates in the Aircraft Lease, (v) Trustee gives
CoreStates written notice of the material terms of the Subsequent Lease at least
30 days prior to entering into the Subsequent Lease of within such time as is
reasonably practical in connection with such lease, and (vi) Trustee does
everything
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reasonably necessary or expedient, as determined by CoreStates, in its
reasonable discretion, to preserve, perfect and maintain, or cause to be
preserved, perfected and maintained, in favor of CoreStates a perfected security
interest prior to all other security interests in the Collateral and the
Subsequent Lease, including, without limitation, obtaining an opinion of counsel
which provides that CoreStates has first priority perfected security interest in
the Collateral and the Subsequent Lease.
2.23 Bankruptcy. Notwithstanding anything to the contrary contained
herein with respect to the Aircraft Lease:
(a) Trustee shall not, without CoreStates written consent, make any
election or take any action pursuant to Section 1110 of the Bankruptcy
Code, 11 U.S.C. SC 1110. Any such election or action made without
CoreStates prior written consent shall be void.
(b) If any action, proceeding, motion or notice shall be commenced or
filed in respect of the Lessee or the Collateral in connection with any
case under the Bankruptcy Code, 11 U.S.C. Sec. 101 et seq. CoreStates
shall have the right, but not the obligation, to conduct any such
litigation with counsel agreed upon between CoreStates and Trustee in
connection therewith. Trustee shall, upon demand, pay to CoreStates all
reasonable costs and expenses (including without limitation reasonable
attorneys' fees) paid or incurred by CoreStates in connection with the
prosecution or conduct of any such proceedings.
(c) Trustee shall promptly, after an officer of its corporate trust
department shall have obtained actual knowledge thereof, notify
CoreStates in writing of any filing by or against the Lessee of a
petition under the Bankruptcy Code, 11 U.S.C. section 101 et seq,
setting forth any information available to Trustee with respect to the
date of such filing, the court in which such petition was filed, and
the relief sought therein. Trustee shall promptly deliver to
CoreStates, following its receipt thereof, any and all notices,
summonses, pleadings, applications and other documents received by
Trustee in connection with any such petition and any proceedings
relating thereto.
2.24 Plaque To Be Affixed. Trustee shall affix or cause to be affixed
in a prominent position on the flight deck and on the engines constituting part
of the Aircraft, a metal plaque of reasonable size, inscribed in fireproof and
legible characters as follows:
"This Aircraft/Engine is owned by Meridian Trust Company, as
Owner Trustee, and is operated by Trans World Airlines, Inc.
and is
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subject to a first mortgage in favor of CoreStates Bank, N.A,
1500 Market Street, Philadelphia, Pennsylvania 19102."
3. Rights of CoreStates. Trustee hereby irrevocably constitutes and
appoints CoreStates and any officer, employee or agent thereof, with full power
of substitution, as their true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of Trustee or in its own name, from
time to time in CoreStates's discretion, for the purpose of carrying out the
terms of this Agreement to take any and all appropriate action and to execute
any and all documents and instruments which may be reasonably necessary or
desirable to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, Trustee hereby gives CoreStates the power and
right, on behalf of Trustee, without assent by Trustee to do the following: (i)
to endorse any loss payment or returned premium check and to make, settle, and
release any claim under any insurance policy with respect to the Collateral,
(ii) to file any claim or take any other action or proceeding in any court of
law or equity for the purpose of collecting any and all monies due under any
Collateral; (iii) to receive payment of and receipt for any and all monies,
claims and other amounts due and to become due at any time in respect of or
arising out of any Collateral; and (iv) without notice to Trustee, upon the
occurrence and continuance of any Event of Default under the terms of this
Agreement (A) to apply each payment in respect of the Collateral in payment or
satisfaction of the Indebtedness Hereby Secured; (B) to commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction, to collect the Collateral or any part thereof and to enforce any
other right in respect to the Collateral; (C) to settle, compromise or adjust
any suit, action or proceeding described above and, in connection therewith, to
give such discharges or releases as CoreStates may deem appropriate; and (D)
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
CoreStates were the absolute owner thereof for all purposes, and to do, at
CoreStates's option, at any time, or from time to time, all acts and things
which CoreStates deems necessary to protect, preserve or realize upon the
Collateral and CoreStates's security interest therein in order to effect the
intent of this Agreement, all as fully and effectively as Trustee might do;
provided, however, that CoreStates shall not be permitted to take such actions
set forth in clauses (i) - (iii) above unless an Event of Default has occurred
and is continuing and CoreStates has given Trustee thirty (30) days' prior
written notice (unless, in CoreStates' sole discretion, circumstances require
CoreStates to act immediately without such notice to preserve its security
interest). Trustee hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest, shall be irrevocable and shall terminate only upon payment in
full of the Indebtedness
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Hereby Secured. The powers conferred on CoreStates hereunder are solely to
protect CoreStates's interests in the Collateral and shall not impose any duty
upon it to exercise such powers. CoreStates shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither it nor any of its officers, directors, employees or agents shall be
responsible to Trustee for any action taken or omitted to be taken in good faith
(any action taken in reliance on the advice of Counsel shall be deemed an action
taken or omitted to be taken in good faith) except only for its own gross
negligence or wilful misconduct, and the foregoing shall not operate to release
CoreStates from any liability arising out of the gross negligence or wilful
misconduct of any of its officers, directors, employees or agents in disposing
of any of the Collateral.
4. Possession and Use of Aircraft. Unless an Event of Default has
occurred and is continuing hereunder, Trustee shall be permitted to remain in
full possession, enjoyment and control of the Aircraft and to manage, operate
and use the same and each part thereof with the rights and franchises
appertaining thereto; provided, always, that the possession, enjoyment, control
and use of the Aircraft shall at all times be subject to the observance and
performance of the terms of this Agreement. It is expressly understood that the
use and possession of the Aircraft by the Lessee under and subject to the
Aircraft Lease or a Lessee under and subject to a Subsequent Lease shall not
constitute a violation of this Section 4. CoreStates agrees that so long as no
default under the Aircraft Lease or a Subsequent Lease has occurred and is
continuing, the Lessee or the lessee under the Subsequent Lease, as the case may
be, shall quietly possess, use and enjoy the Aircraft and the rents, revenues,
profits and income therefrom without hindrance or interruption by CoreStates or
by any other person lawfully claiming under or through CoreStates.
5. Defaults and Other Provisions.
5.1 Event of Default. The term "Event of Default" for the
purpose hereof shall mean:
(a) An Event of Default under the Loan Agreement or any
Financing Document;
(b) Failure to maintain any of the insurance required to be
maintained hereunder;
(c) Any representation or warranty made by Trustee in this
Agreement or any other agreement or document executed and delivered in
connection herewith and therewith or any certificate or report
furnished by Trustee under this Agreement or in any writing furnished
by Trustee to CoreStates in connection with the incurring of the
Indebtedness Secured Hereby, proves to be incorrect in any material
respect as of
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the date when made;
(d) Failure by Trustee to perform or observe any other term,
condition or covenant of this Agreement, or any other agreement or
document delivered pursuant hereto or thereto which shall remain
unremedied for a period of thirty (30) days after written notice
thereof shall have been given to Trustee by CoreStates;
(e) A default by Trustee under the Aircraft Lease or any
Subsequent Lease which is not cured within any cure period provided for
therein;
(f) Any default by the Lessee under the Aircraft Lease (i)
which is not cured by the Lessee or Trustee within the greater of (1)
the cure period, if any, provided for therein or (2) ninety (90) days
following such default, or (ii) unless the Aircraft Lease is terminated
within ninety (90) days following such default;
(g) Any default by the lessee under the Subsequent Lease (i)
which is not cured by the lessee under the Subsequent Lease or Trustee
within the greater of (1) the cure period, if any, provided for therein
or (2) ninety (90) days following such default, or (ii) unless the
Subsequent Lease is terminated within ninety (90) days following such
default;
(h) The occurrence of an Event of Loss (as such term is
defined in the Aircraft Lease whether or not the Aircraft Lease is then
in full force and effect);
(i) Trustee shall make an assignment for the benefit of
creditors, file a petition in bankruptcy, be adjudicated insolvent or
bankrupt; petition or apply to any tribunal for the appointment of, or
have appointed in respect of it, a receiver, manager, statutory
manager, custodian, or any trustee for it or a substantial part of its
assets, or shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or an order is made that it be wound up or that a
liquidator or similar officer is appointed in respect of it or it
resolves to wind itself up or otherwise dissolve itself or gives notice
of its intention to do so, except to reconstruct or amalgamate on
terms approved by CoreStates or there shall have been filed any such
petition or application, or any such proceeding shall have been
commenced against it, which remains undismissed for a period of sixty
(60) days or more; or Trustee by any act or omission shall indicate its
consent to, approval of or acquiescence in any such petition,
application or proceeding or the appointment of a custodian, receiver,
manager, statutory manager or any
14
42
trustee for it or any substantial part of its assets; or
Trustee shall suffer any custodianship, receivership,
statutory management or trusteeship to continue undischarged
for a period of sixty (60) days or more; or
(2) Trustee shall "generally not pay its debts as such debts
become due," as such term is used under the Federal bankruptcy statute
and the same shall not be cured within sixty (60) days; or
(3) Trustee shall have concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them, or made or
suffered a transfer of any of its property which may be fraudulent
under any bankruptcy, fraudulent conveyance or similar law, or, while
insolvent, shall have made any transfer of its property to or for the
benefit of a creditor to obtain a lien upon any of its property through
legal proceedings or distraint which is not vacated within sixty (60)
days from the date thereof;
(j) The Aircraft Lease or Subsequent Lease was not duly
authorized and executed by the Lessee or the lessee under the
Subsequent Lease, as the case may be, or is not valid and enforceable
against the Lessee or the lessee under the Subsequent Lease, as the
case may be, in accordance with its terms; or
(k) Attachments or other liens except for the security
interests created in favor of CoreStates or as otherwise permitted
hereunder, shall be issued or entered against the Collateral and the
same shall not be released and terminated within sixty (60) days
5.2 Occurrence of Event of Default. In the event that an Event of
Default has occurred and is continuing, CoreStates shall have the rights,
options and remedies of a secured party and Trustee shall have the rights,
options and duties of a debtor under the Code regardless of whether the Code or
law similar thereto has been enacted in the jurisdiction wherein the rights or
remedies are asserted, and without limiting the foregoing, CoreStates may
exercise any one or more or all, and in any order, of the remedies, set forth in
the Aircraft Lease or the Subsequent Lease. In addition, in such event Trustee
shall take all such action with respect to the Aircraft permitted under the
Aircraft Lease or the Subsequent Lease as CoreStates may from time to time in
writing direct.
5.3 Sale of Collateral. Any sale of the Collateral by CoreStates
whether under any power of sale hereby given or by virtue of judicial
proceedings shall operate to divest all right, title, interest, claim and
demand whatsoever, either at law or in
15
43
equity, of Trustee in and to the Collateral sold and shall be a perpetual bar,
both at law and in equity, against Trustee, its successors and assigns, and
against any and all persons claiming the property sold or any part thereof
under, by or through Trustee, its successors or assigns (subject, however, to
the then existing rights, if any, of the Lessee under the Aircraft Lease or any
lessee under a Subsequent Lease).
5.4 Application of Payments or Proceeds of Sale or Loss. Subject to the
provisions of Section 11(c) of the Lease any Payments or the proceeds of sale or
loss of the Collateral or any part thereof, and the proceeds and the avails of
any remedy hereunder shall be paid to and applied as follows:
(a) To pay the interest then accrued on the Loans and
Prepayment Amounts, if any;
(b) To the payment of costs, fees, expenses and indemnities
(including, without limitation, expenses of foreclosure or suit, if
any, and of any sale, and the compensation of the agents, attorneys and
counsel of CoreStates and of all expenses, liabilities and advances
incurred or made hereunder by CoreStates, or the holder of holders of
the Note), and of all taxes, assessments or liens relating to this
Agreement and the Collateral, except any taxes, assessments or other
superior lien subject to which said sale may have been made;
(c) To repay the then outstanding principal amount of the
Loans;
(d) To the payment of any other Indebtedness Hereby Secured;
and
(e) The balance to Trustee or such other party as may be
entitled there to.
5.5 No Waiver. No delay or omission of CoreStates, its successors or
assignees, or of any holder of the Note, to exercise any right or power arising
from any Event of Default on the part of Trustee or shall exhaust or impair any
such right or power or prevent its exercise during the continuance of such
default. No waiver by CoreStates of any right hereunder shall be effective
unless in writing and signed by a duly authorized representative of CoreStates.
No waiver by CoreStates or any holder or holders of the Note of any such Event
of Default, whether such waiver be full or partial, shall extend to or be taken
to affect any subsequent Event of Default, or to impair the rights resulting
therefrom, except as may be otherwise provided herein. Each and every right,
power and remedy herein granted to CoreStates shall be in addition to every
other right, power and remedy herein granted or now or hereafter existing at
law, in equity or by statute.
16
44
6. Recourse. Except as specifically set forth herein it is expressly
understood that each of the obligations, covenants and agreements of the Trustee
herein are made not as personal obligations, covenants and agreements by the
Meridian Trust Company. Meridian Trust Company is entering this Agreement solely
in its capacity as Owner Trustee under the Trust Agreement, and except as
expressly provided herein or in the Lease or the Trust Agreement, Meridian Trust
Company (or any successor owner trustee) shall not be personally liable for or
on account of any of the statements, representations, warranties, covenants or
obligations of Trustee hereunder all such liability, if any, being expressly
waived by CoreStates, who shall look only to the Trust Estate (as defined in the
Trust Agreement) for payment or satisfaction. The Indebtedness Hereby Secured is
without recourse to Trustee or the Meridian Trust Company and any obligation of
Trustee to CoreStates or any holder of the Note shall be payable only from the
Collateral and the proceeds thereof and the indemnification obligations of
Trustee set forth in section 7.7(b) here hereof.
7. Miscellaneous.
7.1 Successors and Assigns. Subject to the provisions of
Section 2.10 of this Agreement, whenever any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such
party; and all the covenants, promises and agreements in this Agreement
contained by or on behalf of Trustee or by or on behalf of CoreStates shall bind
and inure to the benefit of the respective successors and assigns of such
parties whether so expressed or not.
7.2 Release. CoreStates shall release this Agreement and the
lien hereof by proper instrument or instruments at such time as all Indebtedness
Hereby Secured has been fully paid or satisfied.
7.3 Notices. Notice to any party required to be given at any
time in connection with this Agreement or the pursuit of any of CoreStates's
remedies shall be in writing and shall be reasonably and properly given if
mailed to such party by certified mail, return receipt requested, postage
prepaid, at the address set forth below or such other address as may be
specified by such party by notice to the other parties pursuant to this Section.
Any such notice shall be deemed to have been given, (i) in the case of personal
delivery, on the date of delivery, (ii) in the case of mailing, on the third
business day following that on which the piece of mail containing such notice is
posted and (iii) in the case of delivery by a reputable air courier, on the next
business day following the date on which such notice was delivered to such
carrier.
17
45
To Trustee at: Meridian Trust Company
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Corporate Trust Dept.
With copies to: Pegasus Aircraft Management Corporation
Four Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
and
Air Transport Leasing, Inc.
0000 Xxxxxx Xxxx.
0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx
To CoreStates at: CoreStates Bank, N.A.
Xxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
7.4 Governing Law. This Agreement shall be interpreted and
enforced between the parties in accordance with the laws of the State of New
York.
7.5 Consent to Jurisdiction. Trustee hereby irrevocably
consents and agrees that any legal action or proceeding arising out of or in any
way connected with this Agreement, or any collateral security related thereto
may be instituted or brought by CoreStates in the courts of the State of New
York sitting in the Borough of Manhattan, City of New York, or the United States
of America for the Southern District of New York, as CoreStates may elect, an by
the execution and delivery of this Agreement Trustee irrevocably submits the
jurisdiction of any such court in any such legal action or proceeding. Trustee
irrevocably consents that service of any summons and/or legal process in any
such legal action or proceeding may be served by the mailing of any such summons
and/or legal process by registered United States mail, postage prepaid to it at
its address as set forth in Section 7.3 hereof or changed in accordance with
said Section, such method of service to constitute, in every respect, sufficient
and effective service of process in any such legal action or proceeding.
18
46
7.6 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement.
7.7 Indemnification. (a) Trustee, not in its individual
capacity but solely as Owner Trustee, shall indemnify and hold CoreStates
harmless from and against any breach of any representation, warranty or covenant
of Trustee made in this Agreement or any other document executed in connection
therewith with respect to its authority to enter this Agreement, (b) Meridian
Trust Company shall indemnify and hold CoreStates harmless against the fraud or
wilful misconduct of Trustee in connection with this Agreement or any other
document executed in connection therewith, and any embezzlement or
misappropriation by Trustee of any Payment under the Aircraft Lease or other
monies which are payable to CoreStates or which constitute Collateral for the
indebtedness Hereby Secured. The agreements in this Section shall survive the
payment of all amounts payable under the Loan Agreement, the Note and hereunder.
7.8 Non-liability of CoreStates. Trustee acknowledges and
agrees that notwithstanding any other provision of the Loan Agreement or this
Agreement, (i) CoreStates is not, and shall not be construed to be, a partner,
joint venturer, alter ego, manager, controlling person or other business
associate or participant of any kind with Trustee and CoreStates does not intend
ever to assume such status; and (ii) CoreStates shall not be deemed responsible
for or a participant in any acts, omissions or decisions of Trustee.
7.9 Rights Cumulative. This Agreement is given as security in
addition to other collateral security given to CoreStates in secure the
Indebtedness Hereby Secured. All rights and remedies herein conferred may be
exercised as to any or all of the Collateral whether or not any proceedings of
any nature are pending. CoreStates shall not be required to resort first to the
Collateral before resorting to any other security or remedies otherwise
available to CoreStates. The rights and remedies set forth herein are cumulative
and in addition to and not in lieu of any other rights and remedies to which
CoreStates may be entitled, whether under the Loan Agreement, at law or in
equity.
7.10 Termination. The assignments made and the security
interests created hereunder shall terminate with respect to the Collateral when
all of the Indebtedness Hereby Secured shall have been discharged and all
amounts owed hereunder or under the Loan Agreement have been indefeasibly paid
to CoreStates.
7.11 Severability. In the event that any provision of this
Agreement is held to be invalid or unenforceable by a court of
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47
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provisions hereof, and to that end, each provision of
this Agreement is hereby declared to be severable.
7.12 Entire Agreement. This Agreement, together with any and
all other documents referred to herein, constitute the entire agreement between
Trustee and CoreStates pertaining to the subject matter contained herein.
7.13 Amendment; Waiver. This Agreement may not be amended,
changed, modified, altered, or terminated except by a written agreement signed
by CoreStates and Trustee, and CoreStates and Trustee may not waive any right
hereunder except by a signed written instrument.
7.14 Section Headings. The section headings and the sections
and subsections of the Agreement are included for convenience only, and shall
not affect the construction or interpretation of any provision hereof.
7.15 Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
20
48
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be executed all as of the day and year
first above written.
MERIDIAN TRUST COMPANY, not in its
individual capacity, but solely as Owner
Trustee under that certain Trust
Agreement dated as of March 31, 1988.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
21
49
SCHEDULE 1
to
SECURITY AGREEMENT AND ASSIGNMENT OF LEASE
Aircraft and Engines:
Manufacturer's
Manufacturer Model U.S. Registration No. Serial No.
------------ ----- --------------------- ---------------
XxXxxxxxx Xxxxxxx DC-9-82 N904TW 49156
Engines: Each of which engines has 750 or more rated takeoff horsepower or
the equivalent thereof.
1) Xxxxx & Xxxxxxx JT8D-217A P709716D
2) Xxxxx & Whitney JT8D-217A P709717D
50
ASSIGNMENT OF COLLATERAL
THIS ASSIGNMENT OF COLLATERAL (the "Collateral Assignment"), is made as
of July 20, 1995 by Pegasus Aircraft Partners, L.P., a Delaware limited
partnership ("Pegasus"), in favor of CoreStates Bank, N.A., a national bank
association ("CoreStates") :
W I T N E S S E T H:
WHEREAS:
A. Pegasus is an owner participant under that certain Trust
Agreement, dated as of March 31, 1988 (the "TWA Trust Agreement") between
Pegasus and Meridian Trust Company ("Trustee"), as owner trustee.
B. Simultaneously herewith CoreStates is amending and
extending a $4,000,000.00 loan facility with Pegasus pursuant to that certain
Amended and Restated Loan Agreement (the "Loan Agreement"), originally dated as
of April 22, 1994 and amended and restated and executed as of the date hereof,
between Pegasus and CoreStates, the loans thereunder to be evidenced by a
Promissory Note, dated as of April 22, 1994, made by Pegasus in favor of
CoreStates (the "Note").
C. It is a condition precedent to CoreStates entering into the
Loan Agreement that Pegasus collaterally assign, as security for its obligation
to pay all amounts and other sums at any time due and owing from or required to
be paid by Pegasus under the terms of the Loan Agreement to or for the benefit
of CoreStates (the "Obligations"), its interest in the TWA Trust Agreement to
CoreStates.
NOW, THEREFORE, in order to induce CoreStates to enter into
the Loan Agreement and in consideration therefor, and in consideration of the
mutual covenants set forth herein, the parties hereto hereby agree as follows:
1. Unless otherwise indicated, each capitalized term used
herein shall have the meaning ascribed thereto in the Loan Agreement.
2. As collateral for all of the Obligations, Pegasus hereby
bargains, sells, transfers, conveys and assigns to the CoreStates all of
Pegasus's rights, title and interest in, to and under:
The Trust (as such term is defined in the Trust Agreement),
together with all estates and interests therein and thereto, and all rights,
powers and privileges thereunder or in respect thereof, and any and all payments
thereunder or in respect thereof to which Pegasus may become entitled (the "TWA
Trust Collateral").
3. Pegasus hereby represents and warrants as follows:
51
a. The TWA Trust Agreement and the TWA Lease are each in full
force and effect;
b. Pegasus's right, title and interest in, to and under the
TWA Trust Agreement and the TWA Trust Collateral constitute 100% of the
beneficial interest in the estate of the TWA Trust;
c. Neither Pegasus nor anyone acting on its behalf has
directly or indirectly offered an interest in the the TWA Trust Collateral for
sale to, or solicited any offer to acquire the same from, any person which offer
or solicitation would subject the same to registration under the Securities Act
of 1933, as amended, or the Securities and Exchange Act of 1934, or any other
Federal or State securities laws;
d. Except for security interests held by CoreStates in the TWA
Trust Collateral, the TWA Trust Collateral is free and clear of all liens,
security interests, claims, charges and other encumbrances, except those created
hereunder;
e. No action, including any filing or recording of any
document, is necessary in order to afford protection to CoreStates under
applicable law in connection with the creation or enforcement of its security
interest hereunder or to perfect CoreStates' security interest granted hereunder
as a perfected first priority security interest in the TWA Trust Collateral and
the proceeds thereof, other than the filing of Uniform Commercial Code (the
"Code") financing statements with the Secretary of State of California and New
Jersey; and
f. The principal place of business and chief executive office
of Pegasus is located at Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 and 0000 Xxxxxx Xxxx. 0xx Xxx., Xxxxxxxxx, XX 00000
4. Pegasus hereby covenants that so long as the Obligations
shall be outstanding and unpaid, in whole or in part, Pegasus will not:
a. Sell, convey or otherwise dispose of the TWA Trust
Collateral, or any portion thereof, nor will Pegasus create, incur or permit to
exist any pledge, mortgage, lien, charge, encumbrance or any security interest
whatsoever with respect to any of the TWA Trust Collateral, or the proceeds
thereof other than that created hereby; or
b. Terminate, amend, or modify the TWA Trust Agreement or any
Financing Document without the prior written consent of CoreStates; or
c. Change its principal place of business or chief executive
office on less than 15 days prior written notice to CoreStates.
5. Pegasus shall defend CoreStates's right, title, special
property and security interest in and to the Trust Collateral against the claims
of any person, firm, corporation or other entity.
6. Pegasus shall execute and deliver all such documents,
2
52
instruments and agreements and take all such action as CoreStates may request to
effectuate this Collateral Assignment.
7. Upon the occurrence of an Event of Default under the Loan
Agreement, Pegasus does hereby constitute and appoint CoreStates as its true and
lawful attorney, with full power of substitution, in the name of Pegasus or in
the name of CoreStates, at the expense of Pegasus but for the benefit of
CoreStates, to collect, assert or enforce any claims, right or title of any kind
in or to the TWA Trust Collateral, to institute and prosecute all actions, suits
and proceedings which CoreStates deems proper in order to collect, assert or
enforce any such claim, right or title, to defend and compromise all actions,
suits and proceedings in respect of any of the TWA Trust Collateral, and to do
all such acts and things in relation thereto as CoreStates shall deem advisable
and to take all action which CoreStates may deem proper in order to provide for
CoreStates the benefits of or under any of the TWA Trust Collateral where any
required consent of a third party to the assignment therefore to CoreStates
shall not have been obtained, provided, that CoreStates shall be required, at
all times, to act in good faith and shall be subject to Lessee's rights of quiet
enjoyment of the Aircraft as provided in Section 4C of the TWA Lease. Pegasus
acknowledges that such powers as are granted to CoreStates hereunder are coupled
with an interest and shall not be revocable by Pegasus in any manner or for any
reason, including, without limitation, the liquidation or dissolution of Pegasus
and that CoreStates shall be entitled to retain for its own account any amounts
collected pursuant to such powers, including, without limitation, any amounts
payable as interest in respect thereof. CoreStates shall have full and
unqualified authority to delegate any or all of the foregoing powers to any
officers, agents or representatives of CoreStates whom CoreStates shall select.
8. This Collateral Assignment may be signed in any number of
counterparts with the same effect as if the signature thereto and hereto were
upon the same instrument.
9. This Collateral Assignment shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York without regard
to principles of conflict of laws.
3
53
IN WITNESS WHEREOF, this Collateral Agreement is executed as of the
date first above written.
PEGASUS AIRCRAFT PARTNERS, L.P.
By: Pegasus Aircraft Management
Corporation
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President, General Counsel
and Secretary
By: Air Transport Leasing
Corporation
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
CORESTATES BANK, N.A.
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
54
July 20, 1995
Trans World Airlines, Inc.
Attention: Xx. Xxxxxxx X. Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Dear Sirs:
Reference is made to that certain Lease (the "Lease"), dated March 20,
1983, as supplemented by Lease Supplement No. 1 and as amended by an Amendment
Agreement dated as of December 15, 1996, Amendments No. 1 dated May 1, 1991,
Amendment No. 2 dated April 15, 1993 and Amendment No. 3 dated as of January 16,
1995, between Meridian Trust Company, not in its individual capacity but solely
as owner trustee ("Trustee") pursuant to that certain Trust Agreement, dated
March 31, 1988, between Trustee and Trans World Airlines, Inc. ("Lessee") (the
"Lease"), relating to one (1) XxXxxxxxx Xxxxxxx Model DC-9-82 Aircraft bearing
Manufacturer's Serial Number 49156 and FAA Registration Number N904TW (the
"Airframe") and two (2) Xxxxx & Whitney Model JT8D-217A Aircraft engines with
manufacturer's Serial Numbers P709716D and P709717D, respectively (the
"Engines") the Airframe and the Engines are collectively referred to herein as
the "Aircraft"). All capitalized terms used herein and not otherwise defined
shall have the respective meanings ascribed to them in the Lease.
In order to secure the repayment and the performance of certain
obligations in connection with that certain Restated and Amended Loan Agreement
(the "Loan Agreement"), between Pegasus and CoreStates Bank, N.A.
("CoreStates"), Pegasus is entering into that certain Assignment of Collateral,
with CoreStates (the "Collateral Assignment"), dated as of the date hereof,
pursuant to which Pegasus is making a collateral assignment to CoreStates of its
interests in, among other things, the Aircraft and the Lease.
1. By its execution of a counterpart of this letter, Lessee hereby
confirms, represents, warrants and covenants to CoreStates that:
(i) The Lease is in full force and effect and is a legal,
valid and binding obligation of Lessee enforceable in accordance with its terms;
and all of the representations, warranties and covenants of Lessee under the
Lease were true and correct on the date made;
(ii) All amounts of Basic Rent and Supplemental Rent due and
payable by Lessee under the Lease prior to the date hereof, if any, have been
55
paid in full, and no amounts of rent due and payable under the Lease after the
date hereof have been prepaid, in whole or in part;
(iii) Except as expressly set forth in the Lease it shall
remain obligated under the Lease during the entire term thereof and that it will
not, without the prior written consent of CoreStates which consent shall not be
unreasonably withheld, amend, modify or terminate the Lease or assign its rights
under the Lease or enter into an agreement to do so, and that any attempted
amendment, modification or termination (other than a termination pursuant to
Section 9 of the Lease) without such consent shall be void;
(iv) To Lessee's knowledge, after having made due inquiry, no
default under the Lease has occurred and is continuing;
(v) Lessee has no claim against Trustee or Pegasus by reason
of the condition of the Aircraft as of the date of Delivery or arising
subsequent thereto;
(vi) No Event of Loss has occurred with respect to the
Aircraft.
2. Lessee hereby acknowledges and consents to the collateral assignment
of the Lease and any and all right, title and interest in the Lease from Pegasus
to CoreStates pursuant to the Collateral Assignment. Such acknowledgement and
consent shall not be deemed to make Lessee a party to such agreements and Lessee
will not be obligated under such agreements except to the extent it is obligated
under the Lease and hereunder.
3. Trustee hereby irrevocably instructs and authorizes Lessee, unless
and until Lessee receives written instructions to the contrary signed by an
authorized officer of CoreStates, to name Corestates as loss payee in lieu of
Trustee and to name CoreStates as additional insured in addition to Trustee and
the Lessee in respect to the insurance referred to in Section 11 of the Lease to
the same extent as Trustee is entitled to be so named pursuant to such Section.
In addition, such insurance shall provide that the insurer shall notify
CoreStates of a cancellation or material change in such coverage at least thirty
(30) days prior to such cancellation or change.
4. Trustee and Pegasus hereby irrevocably notify Lessee that, unless
and until Lessee receives written instructions to the contrary signed by an
authorized officer of CoreStates, all payments under the Lease otherwise payable
to Trustee pursuant to the Lease shall be paid to CoreStates to the following
account; provided, however, that so long as CoreStates shall not have notified
Lessee that an Event of Default has occurred and is continuing under the
Security Agreement Trustee shall be entitled to receive and the Lessee shall be
entitled to pay to Trustee all payments under the Lease other than payments made
in connection with the loss, damage, destruction or sale of the Aircraft, which
loss, damage, destruction or sale payments shall include without limitation any
insurance proceeds, sale proceeds or payments representing stipulated loss
value, termination value and any prepayment of Basic Rent.
56
Bank : CoreStates Bank, N.A.
ABA No. : 000000000
Attention : Leasing Department
Reference : Pegasus Loan
Account No: 0132-0452
5. Unless an Event of Default under the Lease has occurred and is
continuing, CoreStates agrees that Lessee shall quietly possess, use and enjoy
the Aircraft without hindrance or interruption by CoreStates or by any other
person lawfully claiming under or through CoreStates.
6. This Agreement shall be interpreted and enforced between the parties
in accordance with the laws of the State of New York. This Agreement may be
executed in any number of counterparts and by the parties hereto on separate
counterparts but all counterparts shall together constitute a single instrument.
Please execute and return the enclosed copy of this letter.
MERIDIAN TRUST COMPANY, not in its individual
capacity, except as expressly provided herein, but
solely as Owner Trustee under the certain Trust
Agreement dated as of March 31, 1988 between Trustee
and Pegasus.
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
---------------------------
Title: Vice President
---------------------------
3
57
PEGASUS AIRCRAFT PARTNERS, L.P.
By: Pegasus Aircraft Management
Corporation, as Managing General Partner
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President, General Counsel
and Secretary
By: Air Transport Leasing, Inc.,
as Administrative General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
CORESTATES BANK, N.A.
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
ACCEPTED AND AGREED:
TRANS WORLD AIRLINES, INC.
By: /s/ X.X. Xxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
4
58
July 20, 1995
Meridian Trust Company, as Owner Trustee
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Gentlemen:
Reference is made to (i) that certain Trust Agreement (the "Trust Agreement"),
dated as of March 31, 1988, among Pegasus Aircraft Partners, L.P. ("Pegasus")
and Meridian Trust Company as Owner Trustee ("Trustee"), (ii) that certain Loan
Agreement originally dated April 22, 1994 and Amended and Restated as of July
20, 1995 (the "Loan Agreement") and executed as of the date hereof, between
Pegasus and CoreStates Bank, N.A., a national banking association
("CoreStates"), an office at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, (iii) that certain Assignment of Collateral (the "Pegasus Assignment"),
dated the date hereof, from Pegasus to CoreStates (substantially in the form of
Exhibit A attached hereto), (iv) that certain Security Agreement and Assignment
of Lease (the "Security Agreement") dated as of July 20, 1995 between Trustee
and CoreStates and (v) that certain Lease and Lease Supplement No. 1 thereto
(the "TWA Lease") between Trustee and Trans World Airlines, Inc. dated as of May
20, 1983, as supplemented and amended. Unless otherwise defined, capitalized
terms used herein shall have the meaning ascribed to them in the Loan Agreement.
Pursuant to Section ___ of the TWA Trust Agreement, Pegasus hereby authorizes
and directs you, in your capacity as Owner Trustee under the TWA Trust
Agreement, to execute and deliver (i) the Security Agreement and (ii) any other
documents or instruments contemplated under the Security Agreement to which you
are a party, and hereby indemnifies you with respect thereto.
Our foregoing authorization and direction shall also constitute an explicit
instruction to Meridian Trust Company as Trustee to make the representations,
warranties, and covenants set forth in Section 2 of the Security Agreement. The
undersigned hereby agree pursuant to Sections 5.03 and 7.01 of the Trust
Agreement that all costs and expenses incurred by the Trustee or Meridian Trust
Company in complying with the representations, covenants and warranties
contained in the Security Agreement shall be included within the indemnity of
the undersigned set forth in said Sections 5.03 and 7.01 of the Trust Agreement.
Without limitation of the foregoing, in particular, any costs or expenses
associated with compliance by the Trustee with Section 2.3(b), 2.4, 2.7, 2.14,
2.16, 2.21(b), and Section 7.7 of the Security
59
Agreement are hereby explicitly included within the indemnification provisions
contained in Sections 5.03 and 7.01 of the Trust Agreement, and Meridian Trust
Company shall not be required to expend its own funds in performing any of its
foregoing obligations. Upon notice from the Trustee, each of the undersigned
agrees to forward to the Trustee in advance such amount as may be reasonably
demanded by the Trustee to cover the cost and expenses of its performance of the
Trustee's covenants and warranties under the Security Agreement.
In order to secure repayment and the performance of certain obligations in
connection with the Loan Agreement, upon the occurrence of an Event of Default,
Pegasus hereby irrevocably directs you to pay, prior to any disbursements to
Pegasus pursuant to the Trust Agreement and all payments received under the TWA
Lease, received by you to the following account:
Bank : CoreStates Bank, N.A.
ABA No. : 000-0000-00
Attention : Leasing Department
Reference : Pegasus
Account No.: 0132-0452
This letter may be executed in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
By your execution of a counterpart of this letter, you hereby consent to the
transactions contemplated by the Pegasus Assignment and represent, warrant and
agree to comply with the terms set forth herein.
PEGASUS AIRCRAFT PARTNERS, L.P.
By: Pegasus Aircraft Management Corporation,
as Managing General Partner
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President, General Counsel
and Secretary
60
By: Air Transport Leasing, Inc. as
Administrative General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
MERIDIAN TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
---------------------------------
Title: Vice President
---------------------------------
61
July 20, 1995
CoreStates Bank, N.A.
Leasing Department
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Gentlemen :
Reference is made to (i) that certain Trust Agreement (the "Trust
Agreement"), dated March 31, 1988, between Pegasus Aircrafts Partners, L.P.
("Pegasus") and Meridian Trust Company, as Owner Trustee ("Trustee"), (ii) that
certain Restated and Amended Loan Agreement (the "Loan Agreement"), dated as of
July 20, 1995, and executed as of the date hereof, between Pegasus and
CoreStates Bank, N.A., a national banking association ("CoreStates"), and (iii)
that certain Lease Agreement (the "TWA Lease"), between Trustee (as successor in
interest to DC-9T-I, Inc.) and Trans World Airlines, Inc. dated as of May 20,
1983, as supplemented and amended.
To induce you to enter into the Loan Agreement, the undersigned hereby
represents, warrants and covenants that so long as any obligations of Pegasus
under the Loan Agreement are outstanding, the undersigned will not:
(i) pledge or grant a security interest to any party other
than CoreStates in the TWA Lease or any rights contained therein, including,
without limitation, the right to receive payments thereunder; and
(ii) take any action, or fail to take any action, which would
result in the disruption of the payment in the event of an Event of Default
under the TWA Lease (as defined therein) to CoreStates of the Basic Rent
payments (as defined in the TWA Lease).
MERIDIAN TRUST COMPANY not in its individual
capacity, but solely as Owner Trustee under that
certain Trust Agreement dated March 31, 1988 among
Pegasus and Trustee.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
---------------------------------
Title: Vice President
---------------------------------
62
PEGASUS AIRCRAFT PARTNERS, L.P.
By: Pegasus Aircraft Management
Corporation, as Managing General
Partner
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President, General Counsel
and Secretary
By: Air Transport Leasing, Inc., as
Administrative General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
