Exhibit 10(53)

CREDIT AND SECURITY AGREEMENT

dated as of September 10, 1999

between

TOWER AIR, INC.,

as Borrower,

and

GMAC BUSINESS CREDIT, LLC,

as Agent and as Lender

[Credit and Security Agreement]

CREDIT AND SECURITY AGREEMENT

        This CREDIT AND SECURITY AGREEMENT, dated as of September 10, 1999 (this “Credit and Security Agreement”), is by and among TOWER AIR, INC., a Delaware corporation (“Borrower”), with its principal place of business at Hanger 17, JFK International Airport, Jamaica, New York 11430, the financial institution(s) listed on the signature pages hereof and their respective successors and assigns (each, individually, a “Lender” and, collectively, “Lenders”), and GMAC BUSINESS CREDIT, LLC, a Delaware limited liability company (“GMACBC”), with offices at 300 Galleria Officentre, Suite 110, Southfield, Michigan 48034, for itself as a Lender and as the Agent. All capitalized terms used herein are defined in Section 1 of this Credit and Security Agreement.

        WHEREAS, Borrower desires to borrow funds and obtain other financial accommodations from Lenders; and

        WHEREAS, pursuant to Borrower’s request, Lenders are willing to extend such financial accommodations to Borrower upon the terms and conditions set forth herein; and

        WHEREAS, as security for the obligations and liabilities of Borrower under this Credit and Security Agreement, Borrower has agreed to grant to the Agent, for the benefit of Lenders, a security interest in and lien upon certain of Borrower’s property;

        NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements set forth herein, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

1.1 Certain Defined Terms . The following terms used in this Credit and Security Agreement shall have the following meanings:

        “Accounts” means all “accounts” (as defined in the UCC), accounts receivable, contract rights and general intangibles relating thereto, notes, drafts and other forms of obligations owed to or owned by Borrower arising or resulting from the sale of goods or the rendering of services.

        “Affiliate” means, with respect to any Loan Party, any Person (other than the Agent or any Lender): (a) directly or indirectly controlling, controlled by, or under common control with, such Loan Party; (b) directly or indirectly owning or holding five percent (5%) or more of any equity interest in Borrower; (c) five percent (5%) or more of whose stock or other equity interest having ordinary voting power for the election of directors or the power to direct or cause the direction of management, is directly or indirectly owned or held by Borrower; or (d) which has a senior executive officer who is also a senior executive officer of Borrower. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or other equity interest, or by contract or otherwise.

         “Agent” means GMACBC in its capacity as agent for the Lenders under the Loan Documents and any successor in such capacity appointed pursuant to Section  9.2.

        “Agent’s Account” means ABA No. 072000326, for the account of GMAC Business Credit, L.L.C., Account No. 3613249-84 at Bank One Michigan, Detroit, Michigan, Reference: Tower Air, Inc.

        “Agreement” means this Credit and Security Agreement as it may be amended, restated, supplemented or otherwise modified from time to time.

        “Appraisal” means the appraisal delivered by the Appraiser with respect to the Eligible Inventory pursuant to Section  3.1(k) hereof.

        “Appraiser” means Sage-Popovich, Inc. or any other appraiser acceptable to the Agent.

        “Asset Disposition” means the disposition, whether by sale, lease, transfer, loss, damage, destruction, condemnation or otherwise, of any or all of the Collateral of Borrower or any of its Subsidiaries other than sales of Eligible Inventory in the ordinary course of business.

        “Bank Letter of Credit” means each letter of credit issued by a bank acceptable to and approved by the Agent for the account of Borrower and supported by a Risk Participation Agreement.

        “Base Rate” means a variable rate of interest per annum equal to the higher of (a) the rate of interest from time to time published by the Board of Governors of the Federal Reserve System as the “Bank Prime Loan” rate in Federal Reserve Statistical Release H.15(519) entitled “Selected Interest Rates” or any successor publication of the Federal Reserve System reporting the Bank Prime Loan rate or its equivalent, or (b) the Federal Funds Effective Rate. The statistical release generally sets forth a Bank Prime Loan rate for each Business Day. In the event the Board of Governors of the Federal Reserve System ceases to publish a Bank Prime Loan rate or its equivalent, the term “Base Rate” shall mean a variable rate of interest per annum equal to the highest of the “prime rate”, “reference rate”, “base rate”, or other similar rate published from time to time by The Wall Street Journal, Central Edition, or its successors, with the understanding that any such rate may merely be a reference rate and may not necessarily represent the lowest or best rate actually charged to any customer by any financial institution.

        “Blocked Accounts” has the meaning assigned to that term in Section  5.6.

        “Borrower” has the meaning assigned to that term in the preamble to this Agreement.

        “Borrowing Base” means, as of any date of determination, an amount equal to the sum of (a) eighty-five percent (85%) of the value of the Eligible Accounts plus (b) sixty percent (60%) of the orderly liquidation value of the Eligible Rotable Inventory (as determined by the Appraiser and set forth in the Appraisal or any subsequent appraisal, such subsequent appraisal may be conducted on the instruction of the Agent, at the expense of Borrower at any time) plus (c) fifty percent (50%) of the orderly liquidation value of Eligible Consumable Inventory (as determined by the Appraiser and set forth in the Appraisal or any subsequent appraisal, such subsequent appraisal may be conducted on the instruction of the Agent, at the expense of Borrower at any time) in each case subject to such reserves as the Agent in its reasonable discretion may elect to establish; provided, however, that, notwithstanding anything to the contrary contained herein, no more than 60% of the Revolving Loan can be supported by Eligible Inventory included in the Borrowing Base.

        “Borrowing Base Certificate” means a certificate and assignment schedule duly executed by an officer of Borrower appropriately completed and in substantially the form of Exhibit A.

        “Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of Michigan or the city of Detroit, Michigan or is a day on which banking institutions located in any such state or city are closed.

        “Capital Expenditures” means all expenditures (including deposits) for, or contracts for expenditures (excluding contracts for expenditures under or with respect to Capital Leases, but including cash down payments for assets acquired under Capital Leases) with respect to any fixed assets or improvements, or for replacements, substitutions or additions thereto, which have a useful life of more than one year, including the direct or indirect acquisition of such assets by way of increased product or service charges, offset items or otherwise.

        “Capital Lease” means any lease of any property (whether real, personal or mixed) that, in conformity with GAAP, should be accounted for as a capital lease.

        “Cash Equivalents” means: (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within six (6) months from the date of acquisition thereof; (b) commercial paper maturing no more than six (6) months from the date issued and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor’s Corporation or at least P-1 from Moody’s Investors Service, Inc.; and (c) certificates of deposit or bankers’ acceptances maturing within six (6) months from the date of issuance thereof issued by, or overnight reverse repurchase agreements from, any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia having combined capital and surplus of not less than $250,000,000 and not subject to setoff rights in favor of such bank.

        “Closing Date” means September 10, 1999.

        “Collateral” has the meaning assigned to that term in Section  2.7.

        “Collecting Banks” has the meaning assigned to that term in Section  5.6.

        “Commitment” or “Commitments” means the commitment or commitments of Lenders to make Loans as set forth in Section  2.1(a).

        “Compliance Certificate” means a certificate duly executed by the chief executive officer or chief financial officer of Borrower appropriately completed and in substantially the form of Exhibit B.

        “Default” means a condition, act or event that, after notice or lapse of time or both, would constitute an Event of Default if that condition or event were not cured or removed within any applicable grace or cure period.

        “Default Rate” has the meaning assigned to that term in Section  2.2.

        “EBITDA” means, for any period, without duplication, the total of the following for Borrower and its Subsidiaries on a consolidated basis, each calculated for such period: (1) net income determined in accordance with GAAP; plus, to the extent included in the calculation of net income, (2) the sum of (a) income and franchise taxes paid or accrued; (b) Interest Expenses, net of interest income, paid or accrued; (c) interest paid in kind; (d) amortization and depreciation and (e) other non-cash charges (excluding accruals for cash expenses made in the ordinary course of business); less, to the extent included in the calculation of net income, (3) the sum of (a) the income of any Person (other than wholly owned Subsidiaries of Borrower) in which Borrower or a wholly owned Subsidiary of Borrower has an ownership interest except to the extent such income is received by Borrower or such wholly owned Subsidiary in a cash distribution during such period; (b) gains or losses from sales or other dispositions of assets (other than Inventory in the normal course of business); and (c) extraordinary or non-recurring gains, but not net of extraordinary or non-recurring “cash” losses.

        “Eligible Accounts” means, as at any date of determination, the aggregate of all Accounts that the Agent, in its reasonable judgment, deems to be eligible for borrowing purposes. Without limiting the generality of the foregoing, unless otherwise agreed by the Agent, the following Accounts are not Eligible Accounts:

1.2 Accounting Terms . For purposes of this Agreement, all accounting terms not otherwise defined herein shall have the meanings assigned to such terms in conformity with GAAP. Financial statements and other information furnished to the Agent or any Lender pursuant to Section  5.1 shall be prepared in accordance with GAAP (as in effect at the time of such preparation) on a consistent basis. In the event any “Accounting Changes” (as defined below) shall occur and such changes affect financial covenants, standards or terms in this Agreement, then Borrower and Lenders agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the financial condition of Borrower shall be the same after such Accounting Changes as if such Accounting Changes had not been made, and until such time as such an amendment shall have been executed and delivered by Borrower and Requisite Lenders, (a) all financial covenants, standards and terms in this Agreement shall be calculated and/or construed as if such Accounting Changes had not been made, and (b) Borrower shall prepare footnotes to each Compliance Certificate and the financial statements required to be delivered hereunder that show the differences between the financial statements delivered (which reflect such Accounting Changes) and the basis for calculating financial covenant compliance (without reflecting such Accounting Changes). “Accounting Changes” means: (a) changes in accounting principles required by GAAP and implemented by Borrower; and (b) changes in accounting principles recommended by Borrower’s certified public accountants.

1.3 Other Definitional Provisions . References to “Sections”, “Exhibits” and “Schedules” shall be to Sections, Exhibits and Schedules, respectively, of this Agreement unless otherwise specifically provided. Any of the terms defined in Section  1.1 may, unless the context otherwise requires, be used in the singular or the plural depending on the reference. In this Agreement, words importing any gender include the other genders; the words “including,” “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to agreements and other contractual instruments shall be deemed to include subsequent amendments, assignments, and other modifications thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of this Agreement or any other Loan Document; references to Persons include their respective permitted successors and assigns or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations.

SECTION 2. LOANS AND COLLATERAL

2.1  Loans.

2.5 Term of this Agreement . This Agreement shall be effective until September 10, 2001 (the “Termination Date”) unless earlier terminated pursuant to Section  8.3 hereof. The Commitments shall (unless earlier terminated) terminate upon the earlier of (i) the occurrence of an event specified in Section  8.3 or (ii) the Termination Date. Upon termination in accordance with Section  8.3 or on the Termination Date, all Obligations shall become immediately due and payable without notice or demand. Notwithstanding any termination, until all Obligations have been fully paid and satisfied, the Agent, on behalf of Lenders, shall be entitled to retain security interests in and liens upon all Collateral, and even after payment of all Obligations hereunder, Borrower’s obligation to indemnify the Agent and each Lender in accordance with the terms hereof shall continue.

2.6 Statements. The Agent shall render a monthly statement of account to Borrower within twenty (20) days after the end of each month. Such statement of account shall constitute an account stated unless Borrower makes written objection thereto within thirty (30) days from the date such statement is mailed to Borrower. Borrower promises to pay all of its Obligations as such amounts become due or are declared due pursuant to the terms of this Agreement.

2.7 Grant of Security Interest . To secure the payment and performance of the Obligations, including all renewals, extensions, restructurings and refinancings of any or all of the Obligations, Borrower hereby grants to the Agent, on behalf of Lenders, a continuing security interest, lien and mortgage in and to all right, title and interest of Borrower in the following property of Borrower, whether now owned or existing or hereafter acquired or arising and regardless of where located (all being collectively referred to as the “Collateral”): (a) Accounts, and all guaranties and security therefor, and all goods and rights represented thereby or arising therefrom including the rights of stoppage in transit, replevin and reclamation; (b) Inventory; (c) general intangibles (as defined in the UCC); (d) Intellectual Property; (e) all cash and other monies and property of Borrower in the possession or under the control of the Agent, any Lender or any participant; (f) all books, records, ledger cards, files, correspondence, computer programs, tapes, disks and related data processing software that at any time evidence or contain information relating to any of the property described above or are otherwise necessary or helpful in the collection thereof or realization thereon; (g) the Eligible Inventory; (h) all landing and gate rights and any agreements, contracts and licenses with respect thereto; (i) all rights related to terminals (including, without limitation, that certain Agreement dated as of August 1, 1992 between the Port Authority of New York and New Jersey and Borrower as to Building No. 213); (j) the Shares; (k) the Hangars; and (l) proceeds of all or any of the property described above, including, without limitation, the proceeds of any insurance policies covering any of the above-described property.

2.8 Capital Adequacy and Other Adjustments . In the event the Agent or any Lender shall have determined that the adoption after the date hereof of any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve requirements or similar requirements or compliance by the Agent or such Lender or any corporation controlling the Agent or such Lender with any request or directive regarding capital adequacy, reserve requirements or similar requirements (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) from any central bank or governmental agency or body having jurisdiction does or shall have the effect of increasing the amount of capital, reserves or other funds required to be maintained by the Agent or such Lender or any corporation controlling the Agent or such Lender and thereby reducing the rate of return on the Agent’s or such Lender’s or such corporation’s capital as a consequence of its obligations hereunder, then Borrower shall from time to time within fifteen (15) days after notice and demand from such Lender (with a copy to the Agent) or the Agent (together with the certificate referred to in the next sentence) pay to the Agent or such Lender additional amounts sufficient to compensate the Agent or such Lender for such reduction. A certificate as to the amount of such cost and showing the basis of the computation of such cost submitted by the Agent or any Lender to Borrower shall, absent manifest error, be final, conclusive and binding for all purposes.

2.10 Optional Prepayment/Replacement of the Agent or Lenders in Respect of Increased Costs Within fifteen (15) days after receipt by Borrower of written notice and demand from the Agent or any Lender (an “Affected Lender”) for payment of additional costs as provided in Section  2.8, Borrower may, at its option, notify the Agent and such Affected Lender of its intention to do one of the following:

SECTION 3. CONDITIONS TO LOANS

3.1 Conditions to Loans. The obligations of the Agent and each Lender to make Loans and the obligation of the Agent or any Lender to issue Lender Letters of Credit on the Closing Date and on each Funding Date are subject to satisfaction of all of the conditions set forth below.

SECTION 4. BORROWER’S REPRESENTATIONS AND WARRANTIES

        To induce the Agent and each Lender to enter into this Agreement, to make Loans and to issue Lender Letters of Credit, Borrower represents and warrants to the Agent and each Lender that the following statements are and will on Closing Date and each Funding Date be true, correct and complete:

4.1  Organization, Powers, Capitalization .

4.2 Authorization of Borrowing, No Conflict . Borrower has the corporate power and authority to incur the Obligations and to grant security interests in the Collateral. On the Closing Date, the execution, delivery and performance of the Loan Documents by each Loan Party signatory thereto will have been duly authorized by all necessary corporate and shareholder action. Each Loan Document has been duly executed and delivered by each Loan Party which is a signatory thereto. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party and the consummation of the transactions contemplated by this Agreement and the other Loan Documents by each Loan Party do not contravene and will not be in contravention of any applicable law, the corporate charter or bylaws of any Loan Party or any agreement or order by which any Loan Party or any Loan Party’s property is bound. This Agreement is, and the other Loan Documents, including the Revolving Note(s) when executed and delivered will be, the legally valid and binding obligations of the applicable Loan Parties respectively, each enforceable against the Loan Parties, as applicable, in accordance with their respective terms.

4.3 Financial Condition . All financial statements concerning Borrower and its Subsidiaries which have been or will hereafter be furnished by Borrower and its Subsidiaries to the Agent or any Lender pursuant to this Agreement have been or will be prepared in accordance with GAAP consistently applied throughout the periods involved (except as disclosed therein) and do or will present fairly the financial condition of Borrower covered thereby as at the dates thereof and the results of their operations for the periods then ended. The Projections delivered and to be delivered have been and will be prepared by Borrower in light of the past operations of the business of Borrower and its Subsidiaries, and such Projections represent and will represent the good faith estimate of Borrower and its senior management concerning the most probable course of its business as of the date such Projections are prepared and delivered.

4.4 Indebtedness and Liabilities . As of the Closing Date and each Funding Date, neither Borrower nor any of its Subsidiaries has (a) any Indebtedness except as reflected on the most recent financial statements delivered to the Agent and Lenders; or (b) any Liabilities other than as reflected on the most recent financial statements delivered to the Agent and Lenders or as incurred in the ordinary course of business following the date of the most recent financial statements delivered to the Agent and Lenders.

4.5 Account Warranties . Borrower represents, warrants and covenants as to each Account that, at the time of its creation, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered or for services completely rendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account; the Account does not represent a sale to an Affiliate or a consignment, sale or return or a bill and hold transaction; no agreement exists permitting any deduction or discount (other than the discount stated on the invoice); Borrower is the lawful owner of the Account and has the right to assign the same to the Agent, for the benefit of Lenders; the Account is free of all Liens other than those in favor of the Agent, on behalf of Lenders, and the Account is due and payable in accordance with its terms.

4.6 Names . Schedule 4.6 sets forth all names, trade names, fictitious names and business names under which Borrower currently conducts business or has at any time during the past five years conducted business.

4.7 Locations; FEIN . Schedule 4.7 sets forth the location of Borrower’s principal place of business, the location of Borrower’s books and records, the location of all other offices of Borrower and all Collateral locations, and such locations are Borrower’s sole locations for its business and the Collateral. Borrower’s federal employer identification number is set forth on the signature page hereof.

4.8 Title to Properties; Liens . Borrower and each of its Subsidiaries has good, sufficient and legal title, subject to Permitted Encumbrances, to all its respective material properties and assets. Except for Permitted Encumbrances, all such properties and assets are free and clear of Liens. To the best knowledge of Borrower after due inquiry, there are no actual, threatened or alleged defaults with respect to any leases of real property under which Borrower or any of its Subsidiaries is lessee or lessor which would have a Material Adverse Effect.

4.9 Litigation; Adverse Facts . There are no judgments outstanding against any Loan Party or affecting any property of any Loan Party nor is there any action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration now pending or, to the best knowledge of Borrower after due inquiry, threatened against or affecting any Loan Party or any property of any Loan Party which could reasonably be expected to result in any Material Adverse Effect other than as set forth on Schedule 4.9 hereof. No Loan Party has received any opinion or memorandum or legal advice from legal counsel to the effect that it is exposed to any liability which could reasonably be expected to result in any Material Adverse Effect.

4.10 Payment of Taxes . All material tax returns and reports of Borrower and each of its Subsidiaries required to be filed by any of them have been timely filed, and all taxes, assessments, fees and other governmental charges upon such Persons and upon their respective properties, assets, income and franchises which are shown on such returns as due and payable have been paid when due and payable. As of the Closing Date, none of the United States income tax returns of Borrower or any of its Subsidiaries are under audit. No tax liens have been filed and no claims (except as otherwise permitted by Section  5.9) are being asserted with respect to any such taxes. The charges, accruals and reserves on the books of Borrower and each of its Subsidiaries in respect of any taxes or other governmental charges are in accordance with GAAP.

4.11 Performance of Agreements . None of the Loan Parties and none of their respective Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any contractual obligation of any such Person, and no condition exists that, with the giving of notice or the lapse of time or both, would constitute such a default.

4.12 Employee Benefit Plans . Borrower, each of its Subsidiaries and each ERISA Affiliate is in compliance in all material respects with all applicable provisions of ERISA, the IRC and all other applicable laws and the regulations and interpretations thereof with respect to all Employee Benefit Plans. No material liability has been incurred by Borrower, any Subsidiaries or any ERISA Affiliate which remains unsatisfied for any funding obligation, taxes or penalties with respect to any Employee Benefit Plan.

4.13 Intellectual Property . Borrower and each of its Subsidiaries owns, is licensed to use or otherwise has the right to use, all Intellectual Property used in or necessary for the conduct of its business as currently conducted, and all such Intellectual Property is identified on Schedule 4.13.

4.14 Broker’s Fees . No broker’s or finder’s fee or commission will be payable with respect to any of the transactions contemplated hereby.

4.15 Environmental Compliance . Each Loan Party has been and is currently in compliance with all applicable Environmental Laws, including obtaining and maintaining in effect all permits, licenses or other authorizations required by applicable Environmental Laws. There are no claims, liabilities, investigations, litigation, administrative proceedings, whether pending or threatened, or judgments or orders relating to any Hazardous Materials asserted or threatened against any Loan Party or relating to any real property currently or formerly owned, leased or operated by any Loan Party.

4.16 Solvency . After giving effect to the transactions contemplated by the Loan Documents, and from and after the date of this Agreement, Borrower: (a) owns and will own assets the fair salable value of which are (i) greater than the total amount of its liabilities (including contingent liabilities) and (ii) greater than the amount that will be required to pay the probable liabilities of Borrower as they mature; (b) has capital that is not unreasonably small in relation to its business as presently conducted or any contemplated or undertaken transaction; and (c) does not intend to incur and does not believe that it will incur debts beyond its ability to pay such debts as they become due. There is no material fact known to Borrower that has or could have a Material Adverse Effect and that has not been fully disclosed herein or in such other documents, certificates and statements furnished to the Agent or Lenders for use in connection with the transactions contemplated hereby.

4.17 Disclosure . No representation or warranty of Borrower, any of its Subsidiaries or any other Loan Party contained in this Agreement, the financial statements, the other Loan Documents, or any other document, certificate or written statement furnished to the Agent or any Lender by or on behalf of any such Person for use in connection with the Loan Documents contains any untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made. The Projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by such Persons to be reasonable at the time made, it being recognized by the Agent and Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results. There is no material fact known to Borrower that has had or will have a Material Adverse Effect and that has not been disclosed herein or in such other documents, certificates and statements furnished to the Agent or any Lender for use in connection with the transactions contemplated hereby.

4.18 Insurance . Borrower and each of its Subsidiaries maintains adequate insurance policies for public liability, property damage for its business and properties, product liability, and business interruption, no notice of cancellation has been received with respect to such policies and Borrower and each of its Subsidiaries is in compliance with all conditions contained in such policies.

4.19 Compliance with Laws . Neither Borrower nor any of its Subsidiaries is in violation of any law, ordinance, rule, regulation, order, policy, guideline or other requirement of any domestic or foreign government or any instrumentality or agency thereof, having jurisdiction over the conduct of its business or the ownership of its properties, including, without limitation, any violation relating to any use, release, storage, transport or disposal of any Hazardous Material, which violation would subject Borrower or any of its Subsidiaries, or any of their respective officers to criminal liability or have a Material Adverse Effect, and no such violation has been alleged.

4.20 Bank Accounts . Schedule 4.20 sets forth the account numbers and locations of all bank accounts of Borrower and its Subsidiaries.

4.21 Subsidiaries . Borrower has no Subsidiaries other than as set forth on Schedule4.21.

4.22 Employee Matters . Except as set forth on Schedule 4.22, (a) no Loan Party nor any of such Loan Party’s employees is subject to any collective bargaining agreement, (b) no petition for certification or union election is pending with respect to the employees of any Loan Party and no union or collective bargaining unit has sought such certification or recognition with respect to the employees of any Loan Party and (c) there are no strikes, slowdowns, work stoppages or controversies pending or, to the best knowledge of Borrower after due inquiry, threatened between any Loan Party and its respective employees, other than employee grievances arising in the ordinary course of business which could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Except as set forth on Schedule 4.22, neither Borrower nor any of its Subsidiaries is subject to an employment contract.

4.23 Governmental Regulation . None of the Loan Parties is, or after giving effect to any loan will be, subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or to any federal or state statute or regulation limiting its ability to incur indebtedness for borrowed money.

        Borrower may, at any time and from time to time and subject to Section  5.13, amend any one or more of the Schedules referred in this Section  4 and any representation or warranty contained herein which refers to any such Schedule shall from and after the date of any such amendment refer to such Schedule as so amended, provided, however, that in no event may Borrower amend any such Schedule if such amendment would reflect or evidence a Default or Event of Default.

SECTION 5. AFFIRMATIVE COVENANTS

        Borrower covenants and agrees that, so long as any of the Commitments hereunder shall be in effect and until payment in full of all Obligations, unless Requisite Lenders shall otherwise give their prior written consent, Borrower shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section  5 applicable to such Person.

5.1 Financial Statements and Other Reports . Borrower will maintain, and cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP. Borrower will deliver to the Agent and each Lender (unless specified to be delivered solely to the Agent) the financial statements and other reports described below.

5.2 Access to Accountants and Management . Borrower authorizes the Agent and Lenders to discuss the financial condition and financial statements of Borrower and its Subsidiaries with Borrower’s independent public accountants upon reasonable notice to Borrower of its intention to do so, and authorizes such accountants to respond to all of the Agent’s and Lenders’ inquiries. Each Lender may with the consent of the Agent, which will not be unreasonably denied, confer with Borrower’s management directly regarding Borrower’s business, operations and financial condition.

5.3 Inspection . Borrower shall permit the Agent and any authorized representatives designated by the Agent to visit and inspect any of the properties of Borrower or any of its Subsidiaries, including its and their financial and accounting records, and in conjunction with such inspection, to make copies and take extracts therefrom, and to discuss its and their affairs, finances and business with its and their officers and independent public accountants, at such reasonable times during normal business hours and as often as may be reasonably requested. Borrower acknowledges that the Agent intends to make such inspections on at least a quarterly basis. Each Lender may with the consent of the Agent, which will not be unreasonably denied, accompany the Agent on any such visit or inspection. All costs and expenses incurred in connection with such inspections or audits shall be paid by the Borrower.

5.4 Collateral Records . Borrower shall keep full and accurate books and records relating to the Collateral and shall mark such books and records to indicate the Agent’s security interests in the Collateral, for the benefit of Lenders.

5.5 Account Covenants; Verification . Borrower shall, at its own expense: (a) cause all invoices evidencing Accounts and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with Section  5.6 and (b) use its best efforts to assure prompt payment of all amounts due or to become due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Borrower to customers and no returns will be accepted without the Agent’s prior written consent; provided, that until the Agent notifies Borrower to the contrary, Borrower may presume consent. Borrower will immediately notify the Agent in the event that a customer alleges any dispute or claim with respect to an Account or of any other circumstances known to Borrower that may impair the validity or collectibility of an Account. The Agent shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After the occurrence of a Default or an Event of Default, Borrower shall not, without the prior consent of the Agent, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereof, or allow any credit or discount thereon.

5.6 Collection of Accounts and Payments . Borrower shall establish lockboxes and blocked accounts (collectively, “Blocked Accounts”) in Borrower’s name with such banks (“Collecting Banks”) as are acceptable to the Agent (subject to irrevocable instructions acceptable to the Agent as hereinafter set forth) to which all account debtors shall directly remit all payments on Accounts and in which Borrower will immediately deposit all payments made for Inventory or other payments constituting proceeds of Collateral in the identical form in which such payment was made, whether by cash or check. The Collecting Banks shall acknowledge and agree, in a manner satisfactory to the Agent, that all payments made to the Blocked Accounts are the sole and exclusive property of the Agent, for the benefit of Lenders, and that the Collecting Banks have no right of setoff against the Blocked Accounts and that all such payments received will be promptly transferred to the Agent’s Account. Borrower hereby agrees that all payments received by the Agent, whether by cash, check, wire transfer or any other instrument, made to such Blocked Accounts or otherwise received by the Agent and whether on the Accounts or as proceeds of other Collateral or otherwise will be the sole and exclusive property of the Agent, for the benefit of Lenders. Borrower shall irrevocably instruct each Collecting Bank to promptly transfer all payments or deposits to the Blocked Accounts into the Agent’s Account. Borrower, and any of its Affiliates, employees, agents or other Persons acting for or in concert with Borrower, shall, acting as trustee for the Agent, receive, as the sole and exclusive property of the Agent, any monies, checks, notes, drafts or any other payments relating to and/or proceeds of Accounts or other Collateral which come into the possession or under the control of Borrower or any of Borrower’s Affiliates, employees, agents or other Persons acting for or in concert with Borrower, and immediately upon receipt thereof, Borrower or such Persons shall remit the same or cause the same to be remitted, in kind, to the Blocked Accounts or to the Agent at its address set forth in Section  10.4 below.

5.7 Endorsement . Borrower hereby constitutes and appoints the Agent and all Persons designated by the Agent for that purpose as Borrower’s true and lawful attorney-in-fact, with power to endorse Borrower’s name to any of the items of payment or proceeds described in Section  5.6 above and all proceeds of Collateral that come into the Agent’s possession or under the Agent’s control. Both the appointment of the Agent as Borrower’s attorney and the Agent’s rights and powers are coupled with an interest and are irrevocable until payment in full and complete performance of all of the Obligations.

5.8 Corporate Existence . Borrower will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect its corporate existence and all rights and franchises material to its business. Borrower will promptly notify the Agent of any change in its or its Subsidiaries’ ownership or corporate structure.

5.9 Payment of Taxes . Borrower will, and will cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or property before any penalty accrues thereon provided that no such tax need be paid if Borrower or one of its Subsidiaries is contesting same in good faith by appropriate proceedings promptly instituted and diligently conducted and if Borrower or such Subsidiary has established appropriate reserves as shall be required in conformity with GAAP.

5.10 Maintenance of Properties; Insurance . Borrower will maintain or cause to be maintained in good repair, working order and condition all material properties used in the business of Borrower and its Subsidiaries and will make or cause to be made all appropriate repairs, renewals and replacements thereof. Borrower will maintain or cause to be maintained, with financially sound and reputable insurers, public liability and property damage insurance with respect to its business and properties and the business and properties of its Subsidiaries against loss or damage of the kinds customarily carried or maintained by corporations of established reputation engaged in similar businesses and in amounts acceptable to the Agent. Borrower shall cause the Agent, for the benefit of Lenders, to be named as loss payee on all insurance policies relating to any Collateral and as additional insured under all liability policies relating to any Collateral, in each case pursuant to appropriate endorsements in form and substance satisfactory to the Agent and shall collaterally assign to the Agent, for the benefit of Lenders, as security for the payment of the Obligations, all business interruption insurance of Borrower. Borrower shall apply any proceeds received from any policies of insurance relating to any Collateral to the Obligations as set forth in Section  2.4(b).

5.11 Compliance with Laws . Borrower will, and will cause each of its Subsidiaries to, comply with the requirements of all applicable laws, rules, regulations and orders of any governmental authority as now in effect and which may be imposed in the future in all jurisdictions in which Borrower or any of its Subsidiaries is now doing business or may hereafter be doing business, other than those laws the noncompliance with which would not have a Material Adverse Effect.

5.12 Further Assurances . Borrower shall, and shall cause each of its Subsidiaries to, from time to time, execute such guaranties, financing or continuation statements, documents, security agreements, reports and other documents or deliver to the Agent such instruments, certificates of title or other documents as the Agent at any time may reasonably request to evidence, perfect or otherwise implement the guaranties and security for repayment of the Obligations provided for in the Loan Documents. At the Agent’s request, Borrower shall cause any Subsidiaries of Borrower promptly to guaranty the Obligations and to grant to the Agent, on behalf of Lenders, security interests in the real, personal and mixed property of such Subsidiary to secure the Obligations. The Agent is hereby authorized to file one or more financing or continuation statements or amendments thereto without the signature of or in the name of Borrower. Without limiting the generality of the foregoing, Borrower shall, promptly after the Agent’s request therefor, execute and deliver to the Agent (or to such other party as the Agent may direct) such documents, and do and perform any and all such acts, requested by the Agent in order to perfect the Agent’s security interest in the Collateral described in clauses (h), (i) and (k) of Section  2.7.

5.13 Collateral Locations . Borrower will keep the Collateral at the locations specified on Schedule 4.7. With respect to any new location (which in any event shall be within the continental United States), Borrower will execute such documents and take such actions as the Agent deems necessary to perfect and protect the security interests of the Agent, on behalf of Lenders, in the Collateral prior to the transfer or removal of any Collateral to such new location.

5.14 Bailees . If any Collateral is at any time in the possession or control of any warehouseman, bailee or any of Borrower’s agents or processors, Borrower shall, upon the request of Lenders, notify such warehouseman, bailee, agent or processor of the security interests in favor of the Agent, for the benefit of Lenders, created hereby and shall instruct such Person to hold all such Collateral for the Agent’s account subject to the Agent’s instructions.

5.15 Use of Proceeds and Margin Security . Borrower shall use the proceeds of all Loans for proper business purposes (as described in the recitals to this Agreement) consistent with all applicable laws, statutes, rules and regulations. No portion of the proceeds of any Loan shall be used by Borrower or any of its Subsidiaries for the purpose of purchasing or carrying margin stock within the meaning of Regulation G or Regulation U, or in any manner that might cause the borrowing or the application of such proceeds to violate RegulationT or RegulationX or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Securities Act of 1933, as amended.

SECTION 6. FINANCIAL COVENANTS

        Borrower covenants and agrees that so long as any of the Commitments remain in effect and until payment in full of all Obligations and termination of all Lender Letters of Credit, unless Borrower has received the prior written consent of Requisite Lenders, Borrower shall comply with and shall cause each of its Subsidiaries to comply with all covenants in this Section  6 applicable to such Person.

6.1 Tangible Net Worth . Borrower shall at all times maintain Tangible Net Worth of at least $46,000,000.

6.2 Fixed Charge Coverage Ratio. Borrower shall maintain at the end of each fiscal quarter during the periods set forth below a Fixed Charge Coverage Ratio of not less than the ratio set forth below for the applicable period (measured as follows: (i) for the quarter ending December 31, 1999, measured on a trailing basis taking into account the prior quarter; (ii) for the quarter ending March 31, 2000, measured on a trailing basis taking into account the prior two (2) quarters; (iii) for the quarter ending June 30, 2000, measured on a trailing basis taking into account the prior three (3) quarters; and (iv) for the quarter ending September 30, 2000 and each fiscal quarter thereafter, measured on a rolling four (4) quarter basis taking into account such quarter and the prior three (3) fiscal quarters):

6.3 Future Covenants . Borrower agrees that in the event of any extension of the Termination Date or the Maximum Revolving Loan Amount, Borrower shall agree to amend this Section  6 to incorporate such additional financial covenants as the Agent and Borrower deem reasonable in light of Borrower’s financial status and projections.

SECTION 7. NEGATIVE COVENANTS

        Borrower covenants and agrees that so long as any of the Commitments remain in effect and until payment in full of all Obligations and termination of all Lender Letters of Credit, unless Borrower has received the prior written consent of Requisite Lenders, Borrower shall not permit any of its Subsidiaries to:

7.1 Indebtedness and Liabilities . Directly or indirectly create, incur, assume, guaranty, or otherwise become or remain directly or indirectly liable, on a fixed or contingent basis, with respect to any Indebtedness except: (a) the Obligations; (b) Indebtedness (excluding Capital Leases) not to exceed $10,000,000 in the aggregate at any time outstanding secured by purchase money Liens; (c) Indebtedness under Capital Leases not to exceed $10,000,000 outstanding at any time in the aggregate; and (d) Indebtedness existing on the Closing Date and identified on Schedule 7.1(d). Except for Indebtedness described permitted in the preceding sentence, Borrower will not, and will not permit any of its Subsidiaries to, incur any Liabilities except for trade payables and normal accruals in the ordinary course of business not yet due and payable or with respect to which Borrower or any of its Subsidiaries is contesting in good faith the amount or validity thereof by appropriate proceedings and then only to the extent that Borrower or any of its Subsidiaries has established adequate reserves therefor, if appropriate under GAAP.

7.2 Guaranties . Except for endorsements of instruments or items of payment for collection in the ordinary course of business, guaranty, endorse, or otherwise in any way become or be responsible for any obligations of any other Person, whether directly or indirectly by agreement to purchase the indebtedness of any other Person or through the purchase of goods, supplies or services, or maintenance of working capital or other balance sheet covenants or conditions, or by way of stock purchase, capital contribution, advance or loan for the purpose of paying or discharging any indebtedness or obligation of such other Person or otherwise.

7.4 Investments and Loans . Make or permit to exist investments in or loans to any other Person, except: (a) Cash Equivalents; and (b) loans and advances to employees for moving, entertainment, travel and other similar expenses in the ordinary course of business in an aggregate outstanding amount not in excess of $1,000,000 at any time.

7.5 Restricted Payments . Directly or indirectly declare, order, pay, make or set apart any sum for any Restricted Payment.

7.6 Restriction on Fundamental Changes . (a) Enter into any transaction of merger or consolidation; (b) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution); (c) convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business or assets, or the capital stock of any of its Subsidiaries, whether now owned or hereafter acquired; or (d) acquire by purchase or otherwise all or any substantial part of the business or assets of, or stock or other evidence of beneficial ownership of, any Person.

7.7 Transactions with Affiliates . Directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale or exchange of property or the rendering of any service) with any Affiliate or with any officer, director or employee of any Loan Party, except for transactions in the ordinary course of and pursuant to the reasonable requirements of Borrower’s business and upon fair and reasonable terms which are fully disclosed to the Agent and Lenders and which are no less favorable to Borrower than it would obtain in a comparable arm’s length transaction with an unaffiliated Person.

7.8 Environmental Liabilities . (a) Violate any applicable Environmental Law; (b) dispose of any Hazardous Materials (except in accordance with applicable law) into or onto or from, any real property owned, leased or operated by any Loan Party; or (c) permit any Lien imposed pursuant to any Environmental Law to be imposed or to remain on any real property owned, leased or operated by any Loan Party.

7.9 Conduct of Business . From and after the Closing Date, engage in any business other than businesses of the type engaged in by Borrower or any Subsidiary on the Closing Date.

7.10 Compliance with ERISA . Establish any new Employee Benefit Plan or amend any existing Employee Benefit Plan if the liability or increased liability resulting from such establishment or amendment is material. Neither Borrower nor any Subsidiary shall fail to establish, maintain and operate each Employee Benefit Plan in compliance in all material respects with the provisions of ERISA, the IRC and all other applicable laws and the regulations and interpretations thereof.

7.11 Tax Consolidations . File or consent to the filing of any consolidated income tax return with any Person other than Borrower or any of its Subsidiaries.

7.12 Subsidiaries . Establish, create or acquire any new Subsidiaries.

7.13 Fiscal Year . Change its Fiscal Year.

7.14 Press Release; Public Offering Materials . Disclose the name of the Agent or any Lender in any press release or in any prospectus, proxy statement or other materials filed with any governmental entity relating to a public offering of the capital stock of any Loan Party except as may be required by law.

7.15 Bank Accounts . Establish any new bank accounts, or amend or terminate any Blocked Account or lockbox agreement without the Agent’s prior written consent.

SECTION 8. DEFAULT, RIGHTS AND REMEDIES

8.1 Event of Default . “Event of Default” shall mean the occurrence or existence of any one or more of the following:

8.2 Suspension of Commitments . Upon the occurrence of any Default or Event of Default, notwithstanding any grace period or right to cure, the Agent may or upon demand by Requisite Lenders shall, without notice or demand, immediately cease making additional Loans and the Commitments shall be suspended; provided that, in the case of a Default, if the subject condition or event is waived or cured within any applicable grace or cure period, the Commitments shall be reinstated.

8.3 Acceleration . Upon the occurrence of any Event of Default described in the foregoing Sections  8.1(g) or 8.1(h), all Obligations shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Borrower, and the Commitments shall thereupon terminate. Upon the occurrence and during the continuance of any other Event of Default, the Agent may, and upon demand by Requisite Lenders shall, by written notice to Borrower, (a) declare all or any portion of the Obligations to be, and the same shall forthwith become, immediately due and payable and the Commitments shall thereupon terminate and (b) demand that Borrower immediately deposit with the Agent an amount equal to one hundred five percent (105%) of the Letter of Credit Reserve to enable Lender to make payments under the Lender Letters of Credit when required and such amount shall become immediately due and payable.

8.4 Remedies . If any Event of Default shall have occurred and be continuing, in addition to and not in limitation of any other rights or remedies available to the Agent and Lenders at law or in equity, the Agent may and shall upon the request of Requisite Lenders exercise in respect of the Collateral, in addition to all other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC (whether or not the UCC applies to the affected Collateral) and may also (a) notify any or all obligors on the Accounts to make all payments directly to the Agent; (b) require Borrower to, and Borrower hereby agrees that it will, at its expense and upon request of the Agent forthwith, assemble all or part of the Collateral as directed by the Agent and make it available to the Agent at a place to be designated by the Agent which is reasonably convenient to both parties; (c) withdraw all cash in the Blocked Accounts and apply such monies in payment of the Obligations in the manner provided in Section  8.7; (d) without notice or demand or legal process, enter upon any premises of Borrower and take possession of the Collateral; and (e) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Agent’s offices or elsewhere, at such time or times, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Agent may deem commercially reasonable. Borrower agrees that, to the extent notice of sale shall be required by law, at least ten (10) days notice to Borrower of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. At any sale of the Collateral, if permitted by law, the Agent or any Lender may bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness) for the purchase of the Collateral or any portion thereof for the account of the Agent or such Lender. The Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Borrower shall remain liable for any deficiency. The Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. To the extent permitted by law, Borrower hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter enacted. The Agent shall not be required to proceed against any Collateral but may proceed against Borrower directly.

8.5 Appointment of Attorney-in-Fact . Borrower hereby constitutes and appoints the Agent as Borrower’s attorney-in-fact with full authority in the place and stead of Borrower and in the name of Borrower, the Agent or otherwise, from time to time in the Agent’s discretion while an Event of Default is continuing to take any action and to execute any instrument that the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including: (a) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral; (b) to adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereunder or allow any credit or discount thereon; (c) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper, in connection with clause (a) above; (d) to file any claims or take any action or institute any proceedings that the Agent may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Agent and Lenders with respect to any of the Collateral; and (e) to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, assignments, verifications and notices in connection with Accounts and other documents relating to the Collateral. The appointment of the Agent as Borrower’s attorney and the Agent’s rights and powers are coupled with an interest and are irrevocable until payment in full and complete performance of all of the Obligations.

8.6 Limitation on Duty of the Agent with Respect to Collateral . Beyond the safe custody thereof, the Agent and each Lender shall have no duty with respect to any Collateral in its possession or control (or in the possession or control of any agent or bailee) or with respect to any income thereon or the preservation of rights against prior parties or any other rights pertaining thereto. The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Agent accords its own property. Neither the Agent nor any Lender shall be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Agent in good faith.

8.7 Application of Proceeds . Upon the occurrence and during the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by the Agent from or on behalf of Borrower, and Borrower hereby irrevocably agrees that the Agent shall have the continuing exclusive right to apply and to reapply any and all payments received at any time or times after the occurrence and during the continuance of an Event of Default against the Obligations in such manner as the Agent may deem advisable notwithstanding any previous entry by the Agent upon any books and records and (b) the proceeds of any sale of, or other realization upon, all or any part of the Collateral shall be applied: first, to all fees, costs and expenses incurred by the Agent or any Lender with respect to this Agreement, the other Loan Documents or the Collateral; second, to all fees due and owing to the Agent and Lenders; third, to accrued and unpaid interest on the Obligations; fourth, to the principal amounts of the Obligations outstanding; and fifth, to any other indebtedness or obligations of Borrower owing to the Agent or any Lender.

8.8 License of Intellectual Property . Borrower hereby assigns, transfers and conveys to the Agent, for the benefit Lenders, effective upon the occurrence of any Event of Default hereunder, the non-exclusive right and license to use all Intellectual Property owned or used by Borrower together with any goodwill associated therewith, all to the extent necessary to enable the Agent to realize on the Collateral and any successor or assign to enjoy the benefits of the Collateral. This right and license shall inure to the benefit of all successors, assigns and transferees of the Agent and its successors, assigns and transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and license is granted free of charge, without requirement that any monetary payment whatsoever be made to Borrower by the Agent; provided, however, that Borrower shall be entitled to continue to use the name “Tower Air” following the occurrence and during the continuance of any Event of Default so long as (i) the FAA has not revoked Borrower’s air carrier operating certificate, (ii) Borrower has not ceased to operate its regularly scheduled passenger services, charter services or cargo services, (iii) proceedings for dissolution of Borrower have not commenced, or (iv) the Agent has not accelerated the obligations pursuant to Section  8.3 hereof.

8.9 Waivers, Non-Exclusive Remedies . No failure on the part of the Agent or any Lender to exercise, and no delay in exercising and no course of dealing with respect to, any right under this Agreement or the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise by the Agent or any Lender of any right under this Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right. The rights in this Agreement and the other Loan Documents are cumulative and are not exclusive of any other remedies provided by law.

SECTION 9. ASSIGNMENT AND PARTICIPATION

9.1  Assignments and Participations in Loans .

9.4 Set Off and Sharing of Payments . In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default, each Lender is hereby authorized by Borrower at any time or from time to time, with reasonably prompt subsequent notice to Borrower or to any other Person (any prior or contemporaneous notice being hereby expressly waived) to set off and to appropriate and to apply any and all (a) balances held by such Lender or such holder at any of its offices for the account of Borrower or any of its Subsidiaries (regardless of whether such balances are then due to Borrower or its Subsidiaries), and (b) other property at any time held or owing by such Lender or such holder to or for the credit or for the account of Borrower or any of its Subsidiaries, against and on account of any of the Obligations which are not paid when due; except that no Lender or any such holder shall exercise any such right without the prior written consent of the Agent. Any Lender which has exercised its right to set off shall, to the extent the amount of any such set off exceeds its Pro Rata Share of the Obligations, purchase for cash (and the other Lenders or holders shall sell) participations in each such other Lender’s or holder’s Pro Rata Share of the Obligations as would be necessary to cause such Lender to share such excess with each other Lender or holder in accordance with their respective Pro Rata Shares. Borrower agrees, to the fullest extent permitted by law, that (a) any Lender or holder may exercise its right to set off with respect to amounts in excess of its Pro Rata Share of the Obligations and may sell participations in such excess to other Lenders and holders, and (b) any Lender or holder so purchasing a participation in the Loans made or other Obligations held by other Lenders or holders may exercise all rights of set-off, bankers’ lien, counterclaim or similar rights with respect to such participation as fully as if such Lender or holder were a direct holder of Loans and other Obligations in the amount of such participation.

9.5 Disbursement of Funds . The Agent may, on behalf of Lenders, disburse funds to Borrower for Loans requested. Each Lender shall reimburse the Agent on demand for all funds disbursed on its behalf by the Agent, or if the Agent so requests, each Lender will remit to the Agent its Pro Rata Share of any Loan before the Agent disburses same to Borrower. If the Agent elects to require that funds be made available prior to disbursement to Borrower, the Agent shall advise each Lender by telephone, telex or telecopy of the amount of such Lender’s Pro Rata Share of such requested Loan no later than by 1:00 p.m., Eastern time, on the Funding Date for Revolving Loans, and each such Lender shall pay the Agent such Lender’s Pro Rata Share of such requested Loan, in same day funds, by wire transfer to the Agent’s account not later than 3:00 p.m., Eastern time, for Revolving Loans. If any Lender fails to pay the amount of its Pro Rata Share forthwith upon the Agent’s demand, the Agent shall promptly notify Borrower, and Borrower shall immediately repay such amount to the Agent. Any repayment required pursuant to this Section  9.5 shall be without premium or penalty. Nothing in this Section  9.5 or elsewhere in this Agreement or the other Loan Documents, including without limitation the provisions of Section  9.6, shall be deemed to require the Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that the Agent or Borrower may have against any Lender as a result of any default by such Lender hereunder.

9.7 Dissemination of Information . The Agent will provide Lenders with any information received by the Agent from Borrower which is required to be provided to a Lender hereunder; provided, however, that the Agent shall not be liable to Lenders for any failure to do so, except to the extent that such failure is attributable to the Agent’s gross negligence or willful misconduct.

SECTION 10. MISCELLANEOUS

10.1 Expenses and Attorneys’ Fees . Whether or not the transactions contemplated hereby shall be consummated, Borrower agrees to promptly pay all reasonable fees, costs and expenses incurred by the Agent and each of the Lenders in connection with any matters contemplated by or arising out of this Agreement or the other Loan Documents including the following, and all such fees, costs and expenses shall be part of the Obligations, payable on demand and secured by the Collateral: (a) fees, costs and expenses (including attorneys’ fees (including fees of FAA counsel), allocated costs of internal counsel and fees of environmental consultants, accountants and other professionals retained by the Agent) incurred in connection with the examination, review, due diligence investigation, documentation and closing of the financing arrangements evidenced by the Loan Documents; (b) fees, costs and expenses (including attorneys’ fees (including fees of FAA counsel), allocated costs of internal counsel and fees of environmental consultants, accountants and other professionals retained by the Agent) incurred in connection with the review, negotiation, preparation, documentation, execution, syndication, and administration of the Loan Documents, the Loans, and any amendments, waivers, consents, forbearances and other modifications relating thereto or any subordination or intercreditor agreements; (c) fees, costs and expenses incurred by the Agent in creating, perfecting and maintaining perfection of Liens in favor of the Agent, on behalf of Lenders; (d) fees, costs and expenses incurred by the Agent in connection with forwarding to Borrower the proceeds of Loans including the Agent’s or any Lenders’ standard wire transfer fee; (e) fees, costs, expenses and bank charges, including bank charges for returned checks, incurred by the Agent or any Lender in establishing, maintaining and handling lock box accounts, blocked accounts or other accounts for collection of the Collateral; (f) fees, costs, expenses (including attorneys’ fees and allocated costs of internal counsel) of the Agent or any Lender and costs of settlement incurred in collecting upon or enforcing rights against the Collateral or incurred in any action to enforce this Agreement or the other Loan Documents or to collect any payments due from Borrower or any other Loan Party under this Agreement or any other Loan Document or incurred in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement, whether in the nature of a “workout” or in connection with any insolvency or bankruptcy proceedings or otherwise; and (g) all other out-of-pocket expenses relating to any of the foregoing.

10.2 Indemnity . In addition to the payment of expenses pursuant to Section  10.1, whether or not the transactions contemplated hereby shall be consummated, Borrower agrees to indemnify, pay and hold the Agent and each Lender and any holder of the Revolving Notes and the officers, directors, employees, agents, consultants, auditors, persons engaged by the Agent or any Lender and any holder of the Revolving Note(s) to evaluate or monitor the Collateral, affiliates and attorneys of the Agent, Lender and such holders (collectively called the “Indemnitees”) harmless for, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnitee shall be designated a party thereto) that may be imposed on, incurred by, or asserted against that Indemnitee, in any manner relating to or arising out of this Agreement or the other Loan Documents, the consummation of the transactions contemplated by this Agreement, the statements contained in the commitment letters, if any, delivered by the Agent or any Lender, the Agent’s and each Lender’s agreement to make the Loans hereunder, the use or intended use of the proceeds of any of the Loans or the exercise of any right or remedy hereunder or under the other Loan Documents (the “Indemnified Liabilities”); provided that Borrower shall have no obligation to an Indemnitee hereunder with respect to Indemnified Liabilities arising from the gross negligence or willful misconduct of that Indemnitee as determined by a court of competent jurisdiction.

10.4 Notices . Unless otherwise specifically provided herein, all notices shall be in writing addressed to the respective party as set forth below and may be personally served, telecopied or sent by overnight courier service or United States mail and shall be deemed to have been given: (a) if delivered in person, when delivered; (b) if delivered by telecopy, on the date of transmission if transmitted on a Business Day before 4:00 p.m., Eastern time, or, if not, on the next succeeding Business Day; (c) if delivered by overnight courier, two (2) days after delivery to such courier properly addressed; or (d) if by U.S. Mail, four (4) Business Days after depositing in the United States mail, with postage prepaid and properly addressed.

        If to any Lender: Its address indicated on the signature page hereto, in a Lender Addition Agreement or in a notice to the Agent and Borrower or to such other address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with this Section  10.4.

10.5 Survival of Warranties and Certain Agreements . All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement and the making of the Loans hereunder. Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Borrower set forth in Sections  10.1 and 10.2 shall survive the payment of the Loans and the termination of this Agreement.

10.6 Indulgence Not Waiver . No failure or delay on the part of the Agent, any Lender or any holder of the Revolving Note(s) in the exercise of any power, right or privilege hereunder or under the Revolving Note(s) shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

10.7 Marshaling; Payments Set Aside . Neither the Agent nor any Lender shall be under any obligation to marshal any assets in favor of any Loan Party or any other party or against or in payment of any or all of the Obligations. To the extent that any Loan Party makes a payment or payments to the Agent and/or any Lender or the Agent and/or any Lender enforces its security interests or exercise its rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the Obligations or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

10.8 Entire Agreement . This Agreement, the Revolving Note(s) and the other Loan Documents referred to herein embody the final, entire agreement among the parties hereto and supersede any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. There are no oral agreements among the parties hereto.

10.9 Independence of Covenants . All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

10.10 Severability . The invalidity, illegality or unenforceability in any jurisdiction of any provision in or obligation under this Agreement or the other Loan Documents shall not affect or impair the validity, legality or enforceability of the remaining provisions or obligations under this Agreement, or the other Loan Documents or of such provision or obligation in any other jurisdiction.

10.11 Lenders’ Obligations Several; Independent Nature of Lenders’ Rights . The obligation of each Lender hereunder is several and not joint and neither the Agent nor any Lender shall be responsible for the obligation or commitment of any other Lender hereunder. In the event that any Lender at any time should fail to make a Loan as herein provided, the Lenders, or any of them, at their sole option, may make the Loan that was to have been made by the Lender so failing to make such Loan. Nothing contained in any Loan Document and no action taken by the Agent or any Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and, provided the Agent fails or refuses to exercise any remedies against Borrower after receiving the direction of the Requisite Lenders, each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

10.12 Headings . Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

10.13 APPLICABLE LAW . THIS 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.

10.14 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns except that Borrower may not assign its rights or obligations hereunder without the written consent of Lenders.

10.15 No Fiduciary Relationship; Limitation of Liabilities .

10.16 CONSENT TO JURISDICTION . BORROWER HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS, AND IRREVOCABLY AGREES THAT, SUBJECT TO THE AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, REVOLVING NOTE(S) OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE REVOLVING NOTE(S), THE OTHER LOAN DOCUMENTS OR THE OBLIGATIONS.

10.17 WAIVER OF JURY TRIAL . BORROWER, THE AGENT AND EACH LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE REVOLVING NOTE(S) OR THE OTHER LOAN DOCUMENTS. BORROWER, THE AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, THE REVOLVING NOTE(S) AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER, THE AGENT AND EACH LENDER FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

10.18 Construction . Borrower, the Agent and each Lender each acknowledge that it has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel and that this Agreement and the other Loan Documents shall be construed as if jointly drafted by Borrower, the Agent and each Lender.

10.19 Counterparts; Effectiveness . This Agreement and any amendments, waivers, consents, or supplements may be executed in any number of counterparts and by different parties hereto or thereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one and the same instrument. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto. Delivery of an executed counterpart of a signature page to this Agreement, any amendments, waivers, consents or supplements, or to any other Loan Document by telecopier shall be as effective as delivery of a manually executed counterpart hereof or thereof.

10.20 No Duty . All attorneys, accountants, appraisers, and other professional Persons and consultants retained by the Agent or any Lender shall have the right to act exclusively in the interest of the Agent or such Lender and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or nature whatsoever to Borrower or any of Borrower’s shareholders or any other Person.

10.21 Confidentiality . The Agent and Lenders shall hold all nonpublic information obtained pursuant to the requirements hereof and identified as such by Borrower in accordance with such Person’s customary procedures for handling confidential information of this nature and in accordance with safe and sound business practices and in any event may make disclosure to such of its respective Affiliates, officers, directors, employees, agents and representatives as need to know such information in connection with the Loans. If any Lender is otherwise a creditor of Borrower, such Lender may use the information in connection with its other credits. The Agent and Lenders may also make disclosure reasonably required by a bona fide offeree or assignee (or participation), or as required or requested by any Governmental Authority or representative thereof, or pursuant to legal process, or to its accountants, lawyers and other advisors, and shall require any such offeree or assignee (or participant) to agree (and require any of its offerees, assignees or participants to agree) to comply with this Section  10.21. In no event shall the Agent or any Lender be obligated or required to return any materials furnished by Borrower; provided, however, each Offeree shall be required to agree that if it does not become a assignee (or participant) it shall return all materials furnished to it by Borrower in connection herewith.

10.22 Agent’s Consent . To the extent the Agent’s consent is required under any provision hereof, unless such provision explicitly contains a different standard, the Agent shall not unreasonably withhold its consent under such provision.

* * *

        IN WITNESS WHEREOF, each of the parties has caused this Credit and Security Agreement to be duly executed and delivered as of the date first above written.

Schedule 3.1(a)

Closing Documents

1.  Credit and Security Agreement

2.  Revolving Note

3.  Security Agreement (Spare Parts)

4.  Pledge Agreement (Equant stock)