|
| (a)
any and all Revolving Notes made or to be made to the order of Mortgagee by
Mortgagor from time to time pursuant to the terms and conditions of the Credit
Agreement;
|
| (b)
all other Obligations (as defined in the Credit Agreement) of Mortgagor, under
or in connection with the Credit Agreement or the other Loan Documents, whether
such Indebtedness is now existing or hereafter arising; and
|
| (c)
all extensions, renewals and amendments of or to the Notes or such other
Indebtedness, or any replacements or substitutions therefor;
whether on account of principal, interest, reimbursement
obligations, fees, indemnities, and reasonable costs and expenses (including
without limitation, all reasonable fees and disbursements of counsel to
Mortgagee) or otherwise.
|
| “Parts” means
(i) all aircraft equipment, pieces and parts from time to time stored at the
Locations, including, without limitation, all rotable and consumable parts
whether or not serialized, as identified by manufacturer part number, all
airframe, engine and landing gear parts and pieces and all parts used in the
support of operation of the foregoing, including, without limitation,
|
|
all
components, appliances, avionics, hydraulics, gauges, instruments, base
assemblies, sub-assemblies and tooling and (ii) an accessory, appurtenance, or
part of an aircraft (except an aircraft engine or propeller), aircraft engine
(except a propeller), propeller or appliance, that is to be installed at a
later time in an aircraft, aircraft engine, propeller or appliance.
|
| “Security
Agreement” and “Agreement” means this Security Agreement, as
amended, supplemented or otherwise modified from time to time.
|
| “Transportation
Code” means Title 49 of the United States Code, as amended from time to
time, or any similar legislation of the United States enacted to supersede,
amend or supplement such provision.
2. Grant of
Security Interest. As collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, Mortgagor hereby grants to Mortgagee, for and on
behalf of the Lenders, a first priority security interest in all of the
following property now owned or at any time hereafter acquired by Mortgagor or
in which Mortgagor now has or at any time in the future may acquire any right,
title or interest (collectively, the “Collateral”):
|
| (1)
The Parts stored and kept from time to time at one or more of the locations
specified in Exhibit A attached hereto (the “Locations”), as the same
is now and will hereafter be constituted, whether now owned by Mortgagor or
hereafter acquired, leased or intended to be leased whether or not installed on
any engine or attached to any airframe, together with all logs, manuals and
data and inspection, modification and overhaul records maintained in respect of
the Parts, including, without limitation, all such logs, manuals, invoices,
purchase orders, data and records required to be maintained by the FAA or by
any applicable regulatory agency or body of any other jurisdiction, in which
the Parts may then be registered or otherwise, supporting the serviceability
and airworthiness of the Parts;
|
| (2)
All right, title, interest, claims and demands of Mortgagor in, to and under
any and all contracts, agreements and instruments relating to the Parts or any
rights or interests therein to which Mortgagor is now or may hereafter be a
party, together with all rights, powers, privileges, licenses, easements,
options and other benefits of Mortgagor under each contract, agreement and
instrument referred to in this clause (2), including, without limitation, the
right to receive and collect all payments to Mortgagor thereunder now or
hereafter payable to or receivable by Mortgagor pursuant thereto and the
|
|
right
to make all waivers and agreements, to give and receive notices and other
instruments or communications, or to take any other action under or in respect
of any thereof or to take such action upon the occurrence of a default
thereunder, including the commencement, conduct and consummation of legal,
administrative or other proceedings, as shall be permitted thereby or by law,
and to do any and all other things which Mortgagor is or may be entitled to do
thereunder and any right to restitution from any Person in respect of any
determination of invalidity of any thereof;
|
|
|
| (3)
All rents, issues, profits, revenues and other income of the property subjected
or required to be subjected to the lien of this Security Agreement including,
without limitation, all payments or proceeds payable to Mortgagor after
termination of any lease with respect to the parts leased thereunder as the
result of the sale, lease or other disposition thereof, and all estate, right,
title and interest of every nature whatsoever of Mortgagor in and to the same;
|
| (4)
Without limiting the generality of the foregoing, all insurance and requisition
proceeds with respect to the Parts or any part thereof, including but not
limited to the insurance required under the Credit Agreement;
|
| (5)
Without limiting the generality of the foregoing, all monies and securities
from time to time deposited or required to be deposited with Mortgagee pursuant
to any terms of this Security Agreement or required hereby to be held by
Mortgagee hereunder as security for the obligations of Mortgagor hereunder or
under the Credit Agreement; and
(6) All
proceeds of the foregoing.
TO
HAVE AND TO HOLD all and singular the aforesaid property unto Mortgagee, and
its successors and assigns, subject to the terms and provisions set forth in
this Security Agreement.
3. Limitations
on Mortgagee’s Obligations. Anything herein to the contrary notwithstanding,
Mortgagor shall remain liable under each of the agreements pledged hereby to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with and pursuant to the terms
and provisions of each such agreement. Mortgagee shall have no obligation or
liability under any such agreement by reason of or arising out of this
Agreement or the receipt by Mortgagee of any payment relating to such agreement
pursuant hereto, nor shall Mortgagee be obligated in any manner to perform any
of the obligations of Mortgagor
under or pursuant to any agreement, to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party under any such
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
4.
Representations and Warranties. Mortgagor hereby represents and warrants that:
|
| (a)
Title; No Other Security Interests . Except for the security interest granted
to Mortgagee pursuant to this Security Agreement, Mortgagor has not granted any
security interests in, or other claims in respect of, the Collateral. No
security agreement, financing statement or other public notice with respect to
all or any part of the Collateral has been placed by Mortgagor on file or of
record in any public office, except such as may have been filed in favor of
Mortgagee, pursuant to this Security Agreement.
|
| (b)
Perfected First Priority Security Interests . Mortgagor will take such action
as Mortgagee reasonably determines necessary in order to perfect a first
priority security interest in the Collateral in favor of Mortgagee.
|
| (c)
Approvals and Consents . To Mortgagor’s knowledge no consent of any party
(other than Mortgagor) to any agreement pledged hereby is required, or purports
to be required, in connection with the execution, delivery and performance of
this Security Agreement. No consent or authorization of, filing with or other
act by or in respect of any governmental authority applicable to it is required
in connection with the execution, delivery and performance by Mortgagor or the
validity or enforceability against Mortgagor of this Security Agreement other
than those which have been duly obtained, made or performed.
|
| (d)
Certified Air Carrier . Mortgagor is an air carrier certified under 49 USC
Section 44705.
5. Covenants.
Mortgagor covenants and agrees with Mortgagee that, from and after the date of
this Security Agreement until the Obligations are paid in full:
|
| Further
Documentation; Pledge of Instruments and Chattel Paper . At any time and from
time to time, upon the written request of Mortgagee, and at the sole expense of
Mortgagor, Mortgagor will promptly and duly execute and deliver such further
instruments and documents and take such further action as
|
|
Mortgagee
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Security Agreement and of the rights and powers herein
granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in the
applicable jurisdiction with respect to the Security Interests created hereby
to the extent permitted by applicable law. A carbon, photographic or other
reproduction of this Security Agreement shall be sufficient as a financing
statement for filing in any jurisdiction. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper (as such terms are defined under the Code), such
Instrument or Chattel Paper shall be immediately delivered to Mortgagee, duly
endorsed in a manner satisfactory to Mortgagee, to be held as Collateral
pursuant to this Security Agreement.
|
| (b)
Indemnification . Mortgagor hereby agrees to indemnify Mortgagee and its
officers, directors, employees, agents, successors and assigns (each, an “Indemnitee”)
against, and agrees to protect, defend, save and keep harmless each thereof
(whether or not the transactions contemplated herein or in any of the other
Loan Documents are consummated), for, from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket
costs, expenses and disbursements (including reasonable legal fees and expenses
but excluding internal costs and expenses such as salaries and overhead), of
whatsoever kind and nature (collectively called “Expenses”) imposed
on, incurred by or asserted against any Indemnitee, in any way relating to or
arising out of (A) any of the Loan Documents (including, without limitation,
any Expense arising under or relating to ERISA or Section 4975 of the Internal
Revenue Code) or the enforcement of any of the terms hereof or any amendment,
modification or waiver in respect hereof or (B) the Collateral (or any portion
thereof) whether or not arising out of the finance, refinance, ownership,
delivery, nondelivery, storage, lease, possession, use, non-use, operation,
maintenance, registration, reregistration, condition, modification, alteration,
replacement, repair, substitution, sale, return or other disposition of the
Collateral (or any portion thereof) including, without limitation, latent or
other defects, whether or not discoverable, strict tort liability, any damage
to property or the environment, or death or injury to any person and any claim
for patent, trademark or copyright infringement; provided that the foregoing
indemnity as to any Indemnitee shall not extend to any Expense to the extent
resulting from or arising out of or attributable to the willful misconduct or
the gross negligence of such Indemnitee (other than gross negligence imputed to
such Indemnitee solely by reason of its interest in the Collateral).
|
| (d)
Location . Mortgagor will store and keep the Collateral at all times at the
Locations.
6. Mortgagee’s
Appointment as Attorney-in-Fact.
|
| (a)
Powers . Mortgagor hereby irrevocably constitutes and appoints Mortgagee and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Mortgagor and in the name of Mortgagor or in its own name, from
time to time in Mortgagee’s discretion, for the purpose of carrying out
the terms of this Security Agreement, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement, and, without
limiting the generality of the foregoing, Mortgagor hereby gives Mortgagee the
power and right, on behalf of Mortgagor, without notice to or assent by
Mortgagor, to do the following:
|
| (i)
in the case of any Collateral, at any time when any Event of Default shall have
occurred and is continuing, in the name of Mortgagor or its own name, or
otherwise, to take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under any
part of the Collateral or with respect to any other Collateral and to file any
claim or to take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by Mortgagee for the purpose of collecting any
and all such moneys due under any part of the Collateral or with respect to any
other Collateral whenever payable;
|
| (ii)
to pay or discharge taxes and security interests levied or placed on or
threatened against the Collateral to the extent not timely paid or satisfied by
Mortgagor; and
|
| (iii)
upon the occurrence and during the continuance of any Event of Default (A) to
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to
Mortgagee or as Mortgagee shall direct; (B) to amend any of the documents
constituting part of the Collateral; (C) to ask or demand for, collect, receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral;
|
|
(D)
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 thereof
and to enforce any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against Mortgagor with respect to any
Collateral; (F) to settle, compromise or adjust any suit, action or proceeding
described in clause (E) above and, in connection therewith, to give such
discharges or releases as Mortgagee may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Mortgagee were the
absolute owner thereof for all purposes, and to do, at Mortgagee’s option
and Mortgagor’s expense, at any time, or from time to time, all acts and
things which Mortgagee deems necessary to protect, preserve or realize upon the
Collateral and Mortgagee’s security interests thereon and to effect the
intent of this Security Agreement, all as fully and effectively as Mortgagor
might do and subject to the standard of care set forth in paragraph 10 hereof.
|
|
This
power of attorney is a power coupled with an interest and shall be irrevocable.
|
| (b)
Other Powers . Mortgagor also authorizes Mortgagee, at any time and from time
to time, to execute, in connection with the sale provided for in Section 9
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
|
| (c)
No Duty on Mortgagee’s Part . The powers conferred on Mortgagee hereunder
are solely to protect Mortgagee’s interests in the Collateral and shall
not impose any duty upon Mortgagee to exercise any such powers. Mortgagee 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 Mortgagor for any act or failure to
act hereunder, except for its own gross negligence or willful misconduct.
7. Performance
by Mortgagee of Mortgagor’s Obligations. If Mortgagor fails to perform or
comply with any of its agreements contained herein and Mortgagee, as provided
for by the terms of this Security Agreement, shall itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the expenses of
Mortgagee incurred in connection with such performance or compliance, together
with
interest thereon at the default rate set forth in the Credit
Agreement, shall be payable by Mortgagor to Mortgagee on demand and shall
constitute Obligations secured hereby.
8. Proceeds. It
is agreed that if an Event of Default shall occur and be continuing (a) all
proceeds received by Mortgagor consisting of cash, checks and other near-cash
items shall be held by Mortgagor in trust for Mortgagee, segregated from other
funds of Mortgagor, and shall, forthwith upon receipt by Mortgagor, be turned
over to Mortgagee in the exact form received by Mortgagor (duly endorsed by
Mortgagor to Mortgagee, if required), and (b) any and all such proceeds
received by Mortgagee (whether from Mortgagor or otherwise) may, in the sole
discretion of Mortgagee, be held by Mortgagee as collateral security for,
and/or then or at any time thereafter may be applied by Mortgagee against, the
Obligations (whether matured or unmatured) in accordance with the provisions of
the Credit Agreement.
9. Remedies. If
an Event of Default shall occur and be continuing, Mortgagee may exercise, in
addition to all other rights and remedies granted to them in this Security
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, Mortgagee, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon Mortgagor or any other Person (all and each of which demands, defenses,
advertisements and notices Mortgagor hereby waives), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, including, without limitation, entering upon the premises where
all or any part of the Collateral is located and taking immediate possession of
and removing the same by summary proceedings or otherwise (and/or, at Mortgagee’s
option, storing the same at Mortgagor’s premises until disposal thereof by
Mortgagee), all without liability accruing to Mortgagee, and/or may forthwith
sell, lease, amend, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker’s board or office of Mortgagee or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as
it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. Mortgagee shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in Mortgagor, which right or
equity is hereby waived or released. Mortgagor further agrees, at Mortgagee’s
request, to assemble the Collateral and make it available to Mortgagee at
places which Mortgagee shall reasonably select, whether at Mortgagor’s
premises or elsewhere. To the extent permitted by applicable law, Mortgagor
waives all claims, damages and demands it may
acquire against Mortgagee arising out of its exercise of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given, and Mortgagee agrees to give such notice to Mortgagor in any
event, at least 10 days before such sale or other disposition. Mortgagor shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Obligations and the
reasonable fees and disbursements of any attorneys employed by Mortgagee to
collect such deficiency.
10. Limitation
on Duties Regarding Preservation of Collateral. Mortgagee’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as Mortgagee deals with similar property for
its own account. Neither Mortgagee nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of Mortgagor or otherwise.
11. Powers
Coupled with an Interest. All authorizations and agencies herein contained with
respect to the Collateral are irrevocable and powers coupled with an interest.
12.
Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Security Agreement or
the other Loan Documents shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Security
Agreement or the other Loan Documents or of such provision or obligation in any
other jurisdiction.
13. Paragraph
Headings. Section and subsection headings in this Security Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Security Agreement for any other purpose or be given any
substantive effect.
14. No Waiver;
Cumulative Remedies. Mortgagee shall not by any act (except by a written
instrument pursuant to Section 15 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on the
part of Mortgagee, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver
by Mortgagee of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which Mortgagee
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.
15. Waivers and
Amendments: Successors and Assigns. None of the terms or provisions of this
Security Agreement may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by Mortgagor and Mortgagee, provided
that any provision of this Security Agreement may be waived by Mortgagee in a
written letter or agreement executed by Mortgagee or by telex or facsimile
transmission from Mortgagee. This Security Agreement shall be binding upon the
successors and permitted assigns of Mortgagor and shall inure to the benefit of
Mortgagee and its successors and permitted assigns. THIS SECURITY AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF ILLINOIS.
16. APPLICABLE
LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
17.
Incorporation by Reference. Subsection 10.17, Waiver of Jury Trial, and Section
10.4, Notices, as such Subsections are set forth in the Credit Agreement, are
hereby incorporated herein by reference and made a part hereof.
18. Possession
of Collateral. So long as no Event of Default has occurred and is continuing,
Mortgagor shall be suffered and permitted to remain in full possession,
enjoyment and control of the Collateral 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 thereof shall
at all times be subject to the observance and performance of the terms of this
Security Agreement.
19.
Counterparts. This Security Agreement may be executed in counterparts, each of
which when executed shall constitute an original document but all of which
together shall constitute a single agreement.
* * *
IN WITNESS
WHEREOF, each of Mortgagor and Mortgagee has caused this Security Agreement
(Spare Parts) to be duly executed and delivered by its authorized
representative as of the date first above written.
|
|
|
|
|
|
| TOWER AIR, INC.
|
|
|
|
|
|
| By: s/s ▇▇▇▇▇▇▇ Carnaval
|
|
|
|
|
|
| Name:
|
|
|
|
|
|
| Title: Vice President & CFO
|
|
|
|
|
|
| GMAC BUSINESS CREDIT, LLC
|
|
|
|
|
|
| By: s/s ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
|
|
|
| Name:
|
|
|
|
|
|
| Title: Vice President
EXHIBIT “A”
LOCATIONS
| 1.
| ▇▇▇▇▇▇ ▇▇, ▇▇▇ International Airport,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |