FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT dated as of January 11, 1998
(this "Amendment") by and between TOWER AIR, INC., a Delaware corporation
("Debtor"), and TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware corporation
(together with its successors and assigns, the "Secured Party"), amends that
certain Security Agreement dated as of January 9, 1998 (the "Original Agreement"
and as supplemented by Supplement No. 1 (defined below) the "Agreement") by and
between Debtor and Secured Party. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to such terms in the
Agreement.
W I T N E S S E T H:
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WHEREAS, pursuant to the Agreement, Debtor granted to Secured Party a
security interest in, and first priority mortgage over, the Collateral specified
in the Original Agreement, which Collateral includes, among other things, three
(3) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ model JT9D-7J engines bearing manufacturer's serial numbers
662323, 662751 and 686106; eight (8) ▇▇▇▇▇ & Whitney model JT9D-7A engines
bearing manufacturer's serial numbers 662993, 662550, 662338, 662838, 662270,
662498, 662420, 662749 and one (1) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ model JT9D-7Q engine bearing
manufacturer's serial number 702083 (each of which has 750 or more rated takeoff
horsepower or the equivalent thereof); and
WHEREAS, a counterpart of the Original Agreement, as supplemented by
Security Agreement Supplement No. 1 dated January 9, 1998 ("Supplement No. 1")
was filed with the FAA on January 9, 1998 and has not yet been assigned a
conveyance number; and
WHEREAS, Debtor and Secured Party desire to amend the Agreement in certain
respects;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Amendments to Article 1. Article 1 of the Agreement is hereby amended
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in the following manner: (a) The definition of "Drawdown Date" contained in
Article 1 of the Agreement is hereby amended to be and read in its entirety as
follows:
""Drawdown Date" means, with respect to each advance under the Loan to
be made hereunder, the date the Secured Party advances such Loan to
Debtor, the first such advance to take place on the Closing Date and
any subsequent advances to take place upon satisfaction (or waiver in
writing by Secured Party) of the conditions specified in Article 5
hereof."
""Principal Amount" with respect to the Note, means the aggregate
amount of principal unpaid from time to time under the Note."
2. Amendments to Article 2. Article 2 of the Agreement is hereby amended
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in the following manner:
(a) Article 2(a) of the Agreement is hereby amended by (i) inserting the
words "in the maximum aggregate principal amount of FIFTEEN MILLION
DOLLARS ($15,000,000)" immediately after the word "loan" in the second
line of such Article 2(a); (ii) inserting the words ", unless
otherwise agreed in writing by the Secured Party, " immediately after
the words "Amount or" in line five of such Article 2(a); (iii)
inserting the words ", unless otherwise agreed in writing by the
Secured Party," immediately after the words "no amount shall" and
before the words "be advanced after" in line 14 of such Article 2(a);
and (iv) deleting the words "Initial Loan" in line 20 of such Article
2(a) and inserting in lieu thereof the words "initial advance".
(b) Article 2(b) of the Agreement is hereby amended by deleting the third
sentence.
3. Amendments to Article 5. Article 5(j) of the Agreement is hereby
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amended by (i) inserting ", substantially in the form of Attachment 2 hereto,"
immediately before the word "duly" in the first line of such Article 5(j); and
(ii) deleting the words "evidencing in an aggregate" and inserting in lieu
thereof the words "and in an aggregate principal" in line 2 of such Article
5(j).
4. Amendments to Article 7. Article 7(e) of the Agreement is hereby
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amended by deleting the words "provide Secured Party with such certificate as is
described in Article 5(a)(ii) hereof and if any such amount due to any such
maintenance provider form Debtor is not paid in full by Debtor within thirty
(30) days of receipt of an invoice or any other notice from any maintenance
provider of payment being due by Debtor for such maintenance" which appear in
lines 11 through 15 of such Article 7(e) and inserting in lieu thereof the words
", and, if Debtor fails to provide either such certificate or letter to Secured
Party within such three (3) Business Day Period,".
5. Amendment to Attachment 1. Attachment 1 of the Agreement is hereby
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amended by deleting the number "3" which appears immediately after the letter
"Q" in Section 1(c).
6. Amendment to Attachment 2. Attachment 2 of the Agreement is hereby
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amended by inserting the words "and in the amounts set forth in Annex A hereto"
immediately after the parenthetical phrase "(each a "Payment Date")" and before
the words "accrued and unpaid" in line 3 of the second paragraph of such
Attachment 2.
7. Debtor Representations and Warranties. Debtor hereby confirms the
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representations and warranties of Debtor contained in the Agreement. Such
representations and warranties are true and correct as of the date of this
Amendment as though made on and as of the date of this
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Amendment (except to the extent any such representation or warranty relates
solely to an earlier date, in which case such representation or warranty was
true as of such earlier date).
8. Ratification. Except as amended hereby, the Agreement continues and
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shall remain in full force and effect in all respects, and any and all
references to the "Agreement" or "Security Agreement" in any of the Documents
shall be deemed to refer to the Agreement as amended hereby.
9. Governing Law. THE TERMS AND PROVISIONS OF THIS AMENDMENT WILL BE
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CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ANY DISPUTE ARISING OUT OF OR IN
CONNECTION WITH THIS AMENDMENT, WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS.
THIS AMENDMENT HAS BEEN DELIVERED IN CHICAGO, ILLINOIS. EACH OF DEBTOR AND
SECURED PARTY HEREBY (I) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO
ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS AMENDMENT; (II)
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN
▇▇▇▇ COUNTY, ILLINOIS, OVER ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
MATTER ARISING FROM OR RELATED TO THIS AMENDMENT; (III) IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING; (IV) AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN ANY OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW; AND (V) AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR
PROCEEDING AGAINST ANY OTHER PARTY HERETO OR ANY OF SUCH PARTY'S DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR PROPERTY, CONCERNING ANY MATTER ARISING OUT OF OR
RELATING TO THIS AMENDMENT IN ANY COURT OTHER THAN ONE LOCATED IN ▇▇▇▇ COUNTY,
ILLINOIS.
10. Counterparts. This Amendment may be executed in any number of
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separate counterparts, each of which shall be deemed to be an original but all
of which together shall constitute one and the same instrument. A facsimile
signature on any counterpart hereto will be deemed an original for all purposes.
11. Amendments. This Amendment may be changed, modified or amended from
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time to time only by express written agreement of the parties executed by their
authorized representatives.
12. Headings. The headings contained in this Amendment are inserted for
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convenience of reference only and shall not affect the meaning or interpretation
of this Amendment.
13. Payment of Expenses. Regardless of whether or not the transactions
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contemplated hereby are consummated, Debtor agrees to pay or reimburse Secured
Party for all of its out-of-pocket costs and expenses incurred in connection
with the documentation, negotiation and
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execution of this Amendment and any other documents prepared in connection
herewith and the consummation of the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of special
counsel to Secured Party and of FAA counsel.
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IN WITNESS WHEREOF, Debtor and Secured Party have executed this First
Amendment to Security Agreement as of the day and year first above written.
TOWER AIR, INC.,
Debtor
By:
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Name: ▇▇▇▇▇▇ ▇. Nachtoni
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Title: Chairman/CEO
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TRANSAMERICA BUSINESS CREDIT CORPORATION,
Secured Party
By: /s/ ▇▇▇▇ ▇. Fate
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Name: ▇▇▇▇ ▇. Fate
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Title: Senior Vice President
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