Exhibit 10.3.4
EXECUTION
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
AND CONSENT
THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT AND CONSENT (this
"AMENDMENT"), dated as of October 31, 2005, among ATLAS AIR, INC., a Delaware
corporation ("ATLAS AIR"), POLAR AIR CARGO, INC., a California corporation
("POLAR", and together with Atlas Air, each individually, a "BORROWER" and
collectively, "BORROWERS"), ATLAS AIR WORLDWIDE HOLDINGS, INC., a Delaware
corporation ("ATLAS HOLDINGS"), and AIRLINE ACQUISITION CORP I, a Delaware
corporation (together with Atlas Holdings, each individually, a "GUARANTOR" and
collectively, "GUARANTORS"), WACHOVIA BANK, NATIONAL ASSOCIATION, successor by
merger to Congress Financial Corporation, a national banking association, in its
capacity as agent acting for and on behalf of the parties to the Loan Agreement
(as hereinafter defined) as lenders (in such capacity, "AGENT"), and the parties
to the Loan Agreement as lenders (each individually a "LENDER" and collectively,
"LENDERS"). Unless otherwise defined herein, all capitalized terms used herein
and defined in the Loan Agreement referred to below are used herein as therein
defined.
W I T N E S S E T H :
WHEREAS, Agent, Lenders, Borrowers and Guarantors have entered into
financing arrangements pursuant to which Lenders (or Agent on behalf of Lenders)
have made and may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Loan and Security Agreement,
dated November 30, 2004, by and among Agent, Lenders, Borrowers and Guarantors
as amended (as the same may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the "LOAN AGREEMENT", and
together with all agreements, documents and instruments at any time executed
and/or delivered in connection therewith or related thereto, as from time to
time amended, modified, supplemented, extended, renewed, restated, or replaced,
collectively, the "FINANCING AGREEMENTS");
WHEREAS, in connection with the Loan Agreement, (i) Polar executed and
delivered to the Agent that certain Aircraft Engines Security Agreement dated as
of November 30, 2004 (the "POLAR ENGINES SECURITY AGREEMENT"), (ii) Polar
executed and delivered to the Agent that certain Aircraft Spare Parts Security
Agreement dated as of November 30, 2004 (the "POLAR PARTS SECURITY AGREEMENT"),
(iii) Polar executed and delivered to the Agent that certain Aircraft Security
Agreement dated as of November 30, 2004 (the "POLAR AIRCRAFT SECURITY
AGREEMENT"), (iv) Atlas executed and delivered to the Agent that certain
Aircraft Engines Security Agreement dated as of June 27, 2005 (the "ATLAS
ENGINES SECURITY AGREEMENT") and (v) Atlas executed and delivered to the Agent
that certain Aircraft Spare Parts Security Agreement dated as of November 30,
2004 (the "ATLAS PARTS SECURITY AGREEMENT" and, together with the Polar Parts
Security Agreement, the "PARTS SECURITY AGREEMENTS");
WHEREAS, Borrowers have informed Agent that Borrowers intend to sell or
otherwise dispose of certain Spare Parts, which Spare Parts are listed on
SCHEDULE I hereto (the "RELEASED
SPARE PARTS"), pursuant to and in accordance with the terms of Section
9.7(b)(ix) of the Loan Agreement;
WHEREAS, Borrowers have requested that eight Pratt & Whitney JT9D aircraft
engines bearing manufacturer's serial numbers 702193, 662320, 662503, 662991,
685903, 662473, 688856 and 689166 (collectively, the "POLAR ENGINES") be
released from the Polar Engines Security Agreement;
WHEREAS, Borrowers have requested that one (1) Boeing 747-283B aircraft
bearing manufacturer's serial number 21575 and FAA Registration No. N921FT, and
four (4) Pratt & Whitney model JT9D-70A engines bearing manufacturer's serial
numbers 689169, 689167, 689185 and 689184 (collectively, the "POLAR AIRCRAFT")
be released from the Polar Aircraft Security Agreement;
WHEREAS, Borrowers have requested that four General Electric CF6-50E2
aircraft engines bearing manufacturer's serial numbers 517475, 517192, 517598
and 530349 (the "ATLAS ENGINES") be released from the Atlas Engines Security
Agreement;
WHEREAS, Borrowers have requested that the Agent and the Lenders (i)
consent to the sale or other disposition of the Polar Aircraft, (ii) consent to
the use of the Polar Engines and the Atlas Engines for spare parts or the sale
or other disposition of any such engines from time to time (collectively, the
"PROPOSED TRANSACTIONS"), (iii) consent to the release of its security interests
and liens in and to the Polar Aircraft, Polar Engines, Atlas Engines and the
Released Spare Parts (collectively, the "RELEASED ASSETS"), and (iv) make
certain other amendments to the Loan Agreement, and Agent and Lenders are
willing to provide such consents and make such amendments, subject to the terms
and conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
A. AMENDMENTS TO LOAN AGREEMENT.
1. BORROWING BASE. Section 1.24 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"1.24 'Borrowing Base' shall mean, at any time, the amount
equal to:
(a) the sum of:
(i) eighty-five (85%) percent of Eligible Domestic
Accounts, PLUS
(ii) the lesser of (A) the sum of (1) seventy-five
(75%) percent of Eligible Preferred Foreign
Accounts, PLUS (2) the lesser of (x) twenty-five
(25%) percent of all other Eligible Foreign
Accounts or (y) $5,000,000, or (B) $20,000,000,
MINUS
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(b) Reserves."
2. MAXIMUM CREDIT. Section 1.123 of the Loan Agreement is hereby
amended by deleting the text "$60,000,000" therefrom and substituting
"$50,000,000" in lieu thereof.
3. ENGINES, SPARE PARTS AND INVENTORY COVENANTS. Section 7.3(j) of
the Loan Agreement is hereby amended by deleting the text "$50,000,000"
therefrom and substituting "$30,000,000" in lieu thereof.
B. AMENDMENT TO THE ATLAS PARTS SECURITY AGREEMENT. Section 4.2(b) of the
Atlas Parts Security Agreement is hereby amended by deleting the text
"$50,000,000" therefrom and substituting "$30,000,000" in lieu thereof.
C. AMENDMENT TO THE POLAR PARTS SECURITY AGREEMENT. Section 4.2(b) of the
Polar Parts Security Agreement is hereby amended by deleting the text
"$50,000,000" therefrom and substituting "$30,000,000" in lieu thereof.
D. RELEASES.
1. Effective upon the satisfaction of the conditions precedent set
forth in SECTION G hereof, Agent hereby releases and terminates its security
interests in and liens upon the Released Assets; PROVIDED, THAT, nothing
contained herein or otherwise shall be deemed a release or termination by Agent
of any security interests in and liens upon any assets of any Borrower or
Guarantor other than the Released Assets, all of which shall continue in full
force and effect.
2. Concurrently with the delivery of this Amendment, Agent, as
Secured Party, shall duly execute and deliver that certain FAA Partial Release
in the form attached hereto as EXHIBIT A (the "POLAR ENGINES RELEASE"), which
shall have the effect of releasing the Polar Engines from the security interest
and lien of the Polar Engines Security Agreement.
3. Concurrently with the delivery of this Amendment, Agent, as
Secured Party, shall duly execute and deliver that certain FAA Release in the
form attached hereto as EXHIBIT B (the "POLAR AIRCRAFT RELEASE"), which shall
have the effect of releasing the Polar Aircraft from the security interest and
lien of the Polar Aircraft Security Agreement.
4. Concurrently with the delivery of this Amendment, Agent, as
Secured Party, shall duly execute and deliver that certain FAA Partial Release
in the form attached hereto as EXHIBIT C (the "ATLAS ENGINES RELEASE"), which
shall have the effect of releasing the Atlas Engines from the security interest
and lien of the Atlas Engines Security Agreement.
5. The Polar Engines Release, the Polar Aircraft Release and the
Atlas Engines Release are collectively referred to herein as the "RELEASES."
6. The parties hereto agree, at Borrowers' expense, to execute and
deliver such further releases, financing statements, documents, agreements or
other instruments as may reasonably be required to more fully evidence the
Releases, the release of any lien on the Released Assets and the Proposed
Transactions.
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E. CONSENT. Subject to the terms and conditions contained herein,
notwithstanding anything to the contrary contained in the Loan Agreement or any
of the Financing Agreements, and in accordance with Section 11.3 of the Loan
Agreement, the Agent and the Lenders hereby consent to the Proposed
Transactions, it being understood that the Proposed Transactions shall not be
deemed to have been made pursuant to Section 9.7(b)(ix) and/or Section 9.7(b)(x)
of the Loan Agreement.
F. REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrowers and Guarantors to Agent and Lenders pursuant to the other
Financing Agreements, each of Borrowers and Guarantors, jointly and severally,
hereby represents, warrants and covenants with and to Agent and Lenders as
follows (which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof and shall be incorporated into
and made a part of the Financing Agreements):
1. This Amendment has been duly authorized, executed and delivered
by all necessary corporate action on the part of each Borrower and Guarantor
which is a party hereto, and is in full force and effect as of the date hereof,
and the agreements and obligations of Borrowers and Guarantors contained herein
constitute legal, valid and binding obligations of Borrowers and Guarantors
enforceable against them in accordance with their terms.
2. All of the representations and warranties set forth in the Loan
Agreement and the other Financing Agreements, each as amended or modified as
contemplated hereby, are true and correct in all material respects on and as of
the date hereof as if made on the date hereof, except to the extent any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct as of such date.
3. After giving effect to the consents set forth in SECTION E above,
no Default or Event of Default shall exist or have occurred and be continuing on
the date hereof.
4. All necessary actions and proceedings required by the Financing
Agreements in connection with this Amendment, applicable law or regulation and
the transactions contemplated thereby have been duly and validly taken in
accordance with the terms thereof, and all required consents thereto under any
agreement, document or instrument to which Borrowers and Guarantors are a party,
and all applicable consents or approvals of governmental authorities, have been
obtained.
G. CONDITIONS PRECEDENT. This Amendment shall only be effective upon the
satisfaction of each of the following conditions precedent in a manner
satisfactory to Agent:
1. Agent shall have received, as of the date hereof, this Amendment,
duly authorized, executed, and delivered by the parties hereto.
2. After giving effect to the consents set forth in SECTION E above,
no Default or Event of Default shall exist or have occurred and be continuing on
the date hereof.
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H. EFFECT OF THIS AMENDMENT. This Amendment constitutes the entire
agreement of the parties with respect to the subject matter hereof and thereof,
and supersedes all prior oral or written communications, memoranda, proposals,
negotiations, discussions, term sheets and commitments with respect to the
subject matter hereof and thereof. Except as expressly amended pursuant hereto
and except for the agreements expressly contained herein, no other changes or
modifications or waivers to the Financing Agreements are intended or implied,
and in all other respects the Financing Agreements are hereby specifically
ratified, restated and confirmed by all parties hereto as of the effective date
hereof. To the extent that any provision of the Loan Agreement or any of the
other Financing Agreements are inconsistent with the provisions of this
Amendment, the provisions of this Amendment shall control.
I. GOVERNING LAW. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the internal laws of the State of New York (but excluding any principles of
conflicts of law or other rule of law that would cause the application of the
law of any jurisdiction other than the laws of the State of New York).
J. BINDING EFFECT. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
K. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto. Delivery of an executed counterpart of this Amendment by
telecopier shall have the same force and effect as delivery of an original
executed counterpart of this Amendment. Any party delivering an executed
counterpart of this Amendment by telecopier also shall deliver an original
executed counterpart of this Amendment, but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Amendment as to such party or any other party.
L. FURTHER ASSURANCES. The parties hereto agree to promptly take such
action, upon the reasonable request of the Agent or the Lenders as is reasonably
necessary to carry out the intent of this Amendment.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGES TO FOLLOW.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the day and year
first above written.
AGENT: BORROWERS:
WACHOVIA BANK, NATIONAL ATLAS AIR, INC.
ASSOCIATION,
as successor by merger to Congress Financial By: /s/ Dorinda Pannozzo
Corporation, as Agent -----------------------------
DORINDA PANNOZZO
By: /s/ Dave Luce STAFF VICE PRESIDENT
------------------------------- Title: ASSISTANT TREASURER
Title: VICE PRESIDENT --------------------------
----------------------------
POLAR AIR CARGO, INC.
LENDERS:
By: /s/ William C. Bradley
WACHOVIA BANK, NATIONAL -----------------------------
ASSOCIATION, Title: Vice President & Treasurer
as successor by merger to Congress Financial --------------------------
Corporation
GUARANTORS:
By: /s/ Dave Luce
------------------------------- ATLAS AIR WORLDWIDE
Title: VICE PRESIDENT HOLDINGS, INC.
----------------------------
By: /s/ Michael L. Barna
-----------------------------
Title: Senior Vice President
Chief Financial Officer
--------------------------
AIRLINE ACQUISITION CORP I
By: /s/ William C. Bradley
-----------------------------
Title: Vice President & Treasurer
--------------------------